Analytical Techniques in Financial Analysis

Financial year-end coincides with a low point of activity in the operating cycle.

The existence of certain transactions entered into near the end of the year to improve ratios. (correct)

Lack of disclosure in general purpose financial reports inhibits analysis.

One-off items like losses from floods are included in the financial reports.

By understating inventory levels.

By excluding one-off items from the financial statement.

By using cash to pay off short-term debt. (correct)

By increasing payables and reducing receivables.

They are considered insignificant for comparison between entities.

They inhibit the determination of trends in assessing business efficiency. (correct)

They are excluded from profitability calculations.

They must be included in all ratios for meaningful analysis.

<p>To take into account any changes or clarifications to the reported information.</p> Signup and view all the answers

<p>Size and diversification of product lines.</p> Signup and view all the answers