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Choose the Appropriate Alternative from the Given Options: Which of the Following is a Limitation of Financial Analysis? - Accountancy

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MCQ

Choose the appropriate alternative from the given options:
Which of the following is a limitation of financial analysis?

Options

  • It is just a study of reports of the company.

  • It judges the ability of the firm to repay its debts.

  • It identifies the reasons for change in financial position.

  • It ascertains the relative importance of different components of the financial position of the firm.

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Solution

The limitation of financial analysis is that it is just a study of reports of the company.

Hence, the correct answer is It is just a study of reports of the company.

Concept: Financial Statements
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