Financial statement analysis: a. is primarily used to identify account values that meet the normal standards. b. is limited to internal use by a firm's managers. c. provides useful information that can serve as a basis for forecasting future performance. d. provides useful information to shareholders but not to debt holders. e. is enhanced by comparing results to those of a firm's peers but not by comparing results to prior periods.

Question

Business

Valentina Cisneros

25 January, 15:39

Financial statement analysis: a. is primarily used to identify account values that meet the normal standards. b. is limited to internal use by a firm's managers. c. provides useful information that can serve as a basis for forecasting future performance. d. provides useful information to shareholders but not to debt holders. e. is enhanced by comparing results to those of a firm's peers but not by comparing results to prior periods.

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Brayan Singleton · Answer 1

The correct answer is option c.

Explanation:

Financial statement analysis can be defined as the process of analyzing a business's financial statements for decision-making purposes. It is useful for both internal as well as external stakeholders for evaluating the performance of a business.

There are several techniques that are used in analyzing financial statements. These techniques are:

Horizontal analysis Vertical analysis Ratio analysis

External stakeholders use financial statement analysis to understand the health and business value of an organization. While internal stakeholders use it to manage finances.