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Question
Consider the following statements.
Statement 1 - "The financial statements of a business enterprise include funds flow statement."
Statement 2 - "The financial statements of a bµsiness enterprise include funds flow statement and cash flow statements."
Options
Only statement 1 is correct
Only statement 2 is correct
Both the statements are correct
None of these
MCQ
Solution
Both the statements are correct.
Explanation:
Comparative statements, common size statements, trend analysis, ratio analysis, funds flow analysis, and cash flow analysis are all common financial analysis tools.
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Objectives of Analysis of Financial Statements
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