Deck 1: Financial Analysis Techniques and Terminologies

Question 1

Horizontal Analysis shows the comparison of data for several years against a chosen ---------------- year.

A)Base year
B)Previous year
C)Financial year
D)Calender year

Answer 1

Base year

Question 2

Vertical analysis is made to review and analyse the financial statements of -----------------accounting period.

A)One
B)Two
C)Three
D)Four

Answer 2

One

Question 3

Comparison of financial variables of a firm over a period of time is known as--------------

A)Comparative
B)Common-size
C)Trend analysis
D)None of the above

Answer 3

Trend analysis

Question 4

Interpretation requires analysis and ----------------------------------

A)Comaprison
B)Determination
C)Decision Making
D)Conclusion

Question 5

The process of deriving conclusions from the analysis is commonly termed as ----------------

A)Analysis
B)Conclusion
C)Comparison
D)Interpretation

Question 6

Common size Income Statement present the various items as a percentage of ----------------

A)Sales
B)Credit sales
C)Cash sales
D)None of the above

Question 7

External analysis is based on ------------- financial statements

A)Annual
B)Published
C)Prepared
D)Previous

Question 8

Financial Statements provide a summary of --------------------------

A)Accounts
B)Assets
C)Liabilities
D)Expenses

Question 9

When financial statements for a number of years are reviewed and analysed, the analysis is known as ---------------------

A)Vertical nalysis
B)Internal analysis
C)Horizontal analysis
D)External analysis

Question 10

When ratios are calculated from the financial statements of one year, it is known as ---------------------

A)Horizontal analysis
B)Vertiacal analysis
C)Internal Analysis
D)External analysis

Question 11

Horizontal analysis is also known as -----------------------

A)Static analysis
B)Structural analysis
C)Dynamic analysis
D)None of these

Question 12

Trend analysis is significant for

A)Forecasting and budgeting
B)Profit planning
C)Capital rationing
D)None of the above

Question 13

In trend percentage the base year is ----------------------------

A)The first year
B)Last year
C)Any year
D)Second year

Question 14

Comparative statements are a form of ---------------------------

A)Horizontal analysis
B)Vertical analysis
C)Parellel analysis
D)None of the above

Question 15

The term financial ananlysis include both --------- and interpretation

A)Comparison
B)Analysis
C)Conclusion
D)Constructions

Question 16

Vertical analysis is also known as ------------------

A)Dynamic analysis
B)Static analysis
C)External nalysis
D)Internal analysis

Question 17

The statement prepared to disclose accounting information are known as-----

A)Comparative statements
B)Common size statements
C)Financial statements
D)None of the above

Question 18

------------- gives a diagnosis of the profitability and financial position

A)Analysis of financial statements
B)Preparation of financial statements
C)Construction of statements
D)None of the above

Question 19

------------------------ helps in drawing inferences of conclusions

A)Analysis
B)Interpretation
C)Comparison
D)None of the above

Question 20

---------------- establishes the relationship of different individual items which same common items

A)Common size statements
B)Comparative statements
C)Trend analysis
D)Comparative Income Statement

Question 21

Under ------------------------ each item of expenses taken as a percentage on net sales

A)Comparative income statement
B)Comparative balance sheet
C)Common size Balance sheet
D)Common size Income Statement

Question 22

----------- helps to disclose financial position

A)Trial Balance
B)Profit and Loss Account
C)Balance sheet
D)Income Statement

Question 23

Disclose accounting information

A)Balance sheet
B)Trading account
C)Profit and Loss Account
D)Financial statements

Question 24

Afford full diagnosis of the profitability and financial position

A)Preparation of Profit and Loss Account
B)Balance Sheet
C)Final Accounts
D)Analysis of financial statements

Question 25

Study of the trend of the same items of two or more balance sheets

A)Common size Profit and Loss A/C
B)Common size balance sheet
C)Comparative Income statement
D)Comparative Balance Sheet