Cheat sheet · Class 12 · CBSE · Commerce Accountancy
Analysis of Financial Statements cheat sheet
The whole chapter on one page: key formulas, facts and the points to remember, for quick revision before a test.
CBSE Class 12 · Accountancy
Cheat sheet
Chapter 8Analysis of Financial Statements
Comparative = side by side; Common-size = % of a total.
1. Tools
| Tool | Use |
|---|---|
| Comparative statements | change over years (absolute and %) |
| Common-size statements | % of total assets / revenue |
| Ratio analysis | relationships between items |
| Cash flow analysis | cash movements |
2. Objectives
- Judge profitability, solvency, liquidity.
- Compare with other firms (inter-firm) and over time (intra-firm).
3. Limitations
- Historical data; ignores price changes.
- Qualitative factors ignored.
- Window dressing possible.
4. Key Points
- Horizontal analysis: across years.
- Vertical analysis: within a year.
- Base for common-size P&L: revenue from operations.
- Trend analysis uses index numbers.
Remember: 4 tools | objectives | limitations
Analysis of Financial Statements: questions and notes
More Class 12 · CBSE · Commerce Accountancy cheat sheets
- Accounting for Partnership Firms – Fundamentals
- Reconstitution of a Partnership Firm – Admission of a Partner
- Reconstitution of a Partnership Firm – Retirement/Death of a Partner
- Dissolution of Partnership Firm
- Accounting for Share Capital
- Issue and Redemption of Debentures
- Financial Statements of a Company
- Analysis of Financial Statements
- Accounting Ratios
- Cash Flow Statement
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