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Class 12 Analysis of Financial Statements worksheet
CBSE Accountancy. Objectives, tools and limitations of analysis, comparative statements with absolute and percentage changes, common-size statements and trend percentages. Every sheet has 20 questions in three sections and an answer key, and the numbers change every time.
Sample questions
Real questions from this chapter, as the app sets them. Tap Answer to see the answer and working.
Section A · multiple choice
- 1.
Comparing the same item over several years is:
- ratio analysis
- cash flow analysis
- vertical analysis
- horizontal analysis
Answer
(d) horizontal analysis
- 2.
What is meant by “cash flow analysis”?
- studying the inflows and outflows of cash and cash equivalents
- comparing items of one period with each other or with a total
- studying the statements to judge profitability and financial position
- percentages of each year’s figures to a base year’s figure
Answer
(a) studying the inflows and outflows of cash and cash equivalents
- 3.
Which of these is a limitation of analysing financial statements?
- to judge short-term solvency
- to compare with other firms in the industry
- to judge the earning capacity of the business
- it is affected by personal judgement
Answer
(d) it is affected by personal judgement
Section B · short answer
- 4.
What is meant by analysis of financial statements?
Answer
Studying the relationships among items of the financial statements to judge the firm’s profitability and financial position.
- 5.
Explain each term: (a) trend analysis (b) horizontal analysis
Answer
(a) percentages of each year’s figures to a base year’s figure (b) comparing the same item over several periods
Section C · long answer
- 6.
Explain the significance of financial analysis to different users.
Answer
Management judges efficiency; shareholders judge profitability; creditors judge liquidity; lenders and debentureholders judge solvency; employees judge stability; government judges growth and tax.
Fresh sheets for your child
In the app, every Analysis of Financial Statements sheet is new: the app remembers the questions your child has already had and leaves them out. Print the sheet as a PDF, or use notebook mode and write the answers in a notebook.
Coming soon for Android and iPhone.