Question : A shareholder's analysis of financial statements is an illustration of -
Option 1: Internal Analysis
Option 2: External Analysis
Option 3: Horizontal Analysis
Option 4: Vertical Analysis
Correct Answer: External Analysis
Solution : Financial statements offer a picture of the state of a company's finances at a specific period and offer information on its operations, profitability, cash flow, and general health. Financial statements are necessary for shareholders to make educated choices regarding their equity investments, particularly when it comes time to cast votes on corporate issues.
Shareholders have access to a number of instruments for performing these equity analyses. They should assess their stocks using a number of measurements rather than just a few in order to make better selections. Profitability ratios, liquidity ratios, debt ratios, efficiency ratios, and pricing ratios are some of the measures that are available.
Hence shareholder's analysis of financial statements is an illustration of External Analysis.
Hence the correct answer is Option 2.
Question : Types of financial statement analysis are:
Option 1: External analysis
Option 2: Internal analysis
Option 3: Horizontal and vertical analysis
Option 4: All of the above
Question : ___________ analysis is considered as static?
Option 2: Vertical Analysis
Option 3: External Analysis
Option 4: Horizontal Analysis
Question : ______________ analysis is considered as dynamic.
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