What is the purpose of financial statement analysis?
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Financial statement analysis helps assess a company's financial health, performance, and potential risks for decision-making.
Which financial statement provides insight into a company’s profitability?
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The income statement details revenues, expenses, and net profit, offering a clear view of a company's profitability.
What does the current ratio measure in financial analysis?
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The current ratio assesses a company's ability to cover short-term liabilities with short-term assets.
Why is cash flow analysis important?
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Cash flow analysis helps determine whether a company generates enough cash to sustain operations and investments.
What does the debt-to-equity ratio indicate?
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The debt-to-equity ratio measures a company’s financial leverage by comparing total debt to shareholders' equity.
How does trend analysis help in financial decision-making?
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Trend analysis identifies patterns in financial performance over time to make informed business decisions.