Financial analysis
A) uses historical financial statements and is thus useful only to assess past performance.
B) relies on generally accepted accounting principles to make comparisons between companies valid.
C) uses historical financial statements to measure a company's performance and in making financial projections of future performance.
D) is accounting record-keeping using generally accepted accounting principles.

Question

Quizplus · Accepted Answer

Financial analysis uses historical financial statements as a tool to measure a company's past performance and also helps in making projections of future performance based on these statements. The analysis is not limited to just accounting record keeping but also involves interpretation of the data to make informed decisions. The use of generally accepted accounting principles helps in making accurate comparisons between companies.

Financial Analysis