Question

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.

Answer 1

The correct answer is option c.

Step-by-step 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:

1. Horizontal analysis
2. Vertical analysis
3. 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.