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Tools of Financial Analysis

Board » Bihar Board » Class 12th » English Medium » Commerce » Accountancy » L-14: Tools of Financial Analysis

Objective Questions (MCQs)

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1. Comparative financial analysis process shows the comparison between the items of which statement:

  • (A) Balance Sheet
  • (B) Profit & Loss Statement
  • (C) Both (A) and (B)
  • (D) None of these
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2. Comparative Financial Statements show:

  • (A) Financial position of a concern
  • (B) Earning capacity of a concern
  • (C) Both of these
  • (D) None of these
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3. Trend ratios and trend percentages are used in:

  • (A) Dynamic Analysis
  • (B) Static Analysis
  • (C) Horizontal Analysis
  • (D) Vertical Analysis
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4. Tools for comparison of financial statements are:

  • (A) Comparative Balance Sheet
  • (B) Comparative Income Statement
  • (C) Common-size Statement
  • (D) All of the above
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5. For calculating trend percentage any year can be selected as:

  • (A) Current year
  • (B) Previous year
  • (C) Base year
  • (D) None of these
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6. The analysis of a financial statement by a shareholder is an example of:

  • (A) External Analysis
  • (B) Internal Analysis
  • (C) Vertical Analysis
  • (D) Horizontal Analysis
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7. The most commonly used tools for financial analysis are:

  • (A) Comparative Statement
  • (B) Common-size Statement
  • (C) Accounting Ratios
  • (D) All of the above
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8. Common-size Statement is also known as:

  • (A) Dynamic Analysis
  • (B) Horizontal Analysis
  • (C) Vertical Analysis
  • (D) External Analysis
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9. Payment of Income-tax is considered as:

  • (A) Direct Expenses
  • (B) Indirect Expenses
  • (C) Operating Expenses
  • (D) None of these
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10. The Break-even point refers to that point where:

  • (A) Total Costs are more than Total Sales
  • (B) Total Costs are less than Total Sales
  • (C) Total Costs are half of the Total Sales
  • (D) Total Cost are equal to total sales
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11. Common-size financial statements are mostly prepared:

  • (A) In proportion
  • (B) In percentage
  • (C) (A) and (B) both
  • (D) None of these
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12. A company's shareholders fund was ₹8,00,000 in the year 2015. It is because ₹ 12,00,000 in the year 2016. What is the percentage of change?

  • (A) 100 %
  • (B) 25 %
  • (C) 50 %
  • (D) 33.3 %
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13. A company's net sales are ₹15,00,000; cost of sales is ₹10,00,000 and indirect expenses are ₹ 3,00,000, the amount of gross profit will be:

  • (A) ₹ 13,00,000
  • (B) ₹ 5,00,000
  • (C) ₹ 2,00,000
  • (D) ₹ 12,00,000
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14. Sales less cost of goods sold is called:

  • (A) Operating Profit
  • (B) Gross Profit
  • (C) Net Profit
  • (D) Total Profit
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15. Comparative Statements are also known as:

  • (A) Dynamic Analysis
  • (B) Horizontal Analysis
  • (C) Vertical Analysis
  • (D) External Analysis
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16. Which of the following is not the method of financial statement analysis?

  • (A) Ratio Analysis
  • (B) Comparative Analysis
  • (C) Trend Analysis
  • (D) Capitalisation Method
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17. If the total assets of a firm are ₹10,00,000 and its non-current assets are ₹ 6,00,000, what will be the percentage of current assets on total assets?

  • (A) 60 %
  • (B) 50 %
  • (C) 40 %
  • (D) 30 %
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18. In a common-size balance sheet, total equity and liabilities are assumed to be equal to:

  • (A) 1000
  • (B) 100
  • (C) 10
  • (D) 1
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19. If the total assets of a firm are ₹ 12,00,000 and its non-current assets are ₹ 9,00,000, what will be the percentage of non-current assets to total assets?

  • (A) 50 %
  • (B) 75 %
  • (C) 25 %
  • (D) 80 %
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20. Horizontal Analysis is also known as:

  • (A) Dynamic Analysis
  • (B) Structural Analysis
  • (C) Static Analysis
  • (D) None of these
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21. Interpretation of financial statements includes:

  • (A) Criticisms and Analysis
  • (B) Comparison and Trend Study
  • (C) Drawings Conclusion
  • (D) All of the above
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