Question

Assertion (A): Quality of management and staff, firms ability to develop new products, customer satisfaction, etc., are ignored in financial analysis.

Reason (R): Since financial statements do not record qualitative elements of the business and consider only those items which can be measured in terms of money, financial analysis also ignores qualitative factors.

In the context of the above two statements, which of the following is correct?

Options

• (A) and (R) both are correct and (R) correctly explains (A).

• Both (A) and (R) are correct but (R) does not explain (A).

• Both (A) and (R) are incorrect.

• (A) is correct but (R) is incorrect.

Answer 1

(A) and (R) both are correct and (R) correctly explains (A).