BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Dependence on historical costs
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Inflationary effects
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Based on specific time period
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None of the above
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Detailed explanation-1: -No Qualitative Information: Financial statements contain only monetary information but not qualitative information like industrial relations, industrial climate, labour relations, quality of work, etc. They are Only Interim Reports: Profit and loss account discloses the profit/loss for a specified period.
Detailed explanation-2: -Some other limitations of financial analysis are mentioned below : The financial analysis does not contemplate cost price level changes. The financial analysis might be ambiguous without the prior knowledge of the changes in accounting procedure followed by an enterprise.
Detailed explanation-3: -Which of the following is not a limitation of ‘Financial Statements Analysis’? It is affected by personal bias.