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Question:

State the meaning of Analysis and Interpretation.

Answer:

Analysis and Interpretation refers to a systematic and critical examination of
the financial statements. It not only establishes cause and e Tect relationship
among the various items of the financial statements but also presents the
financial data in a proper manner. The main purpose of Analysis and
Interpretation is to present the financial data in such a manner that is easily
understandable and self-explanatory. This not only helps the accounting users to
assess the fi nancial performance of the business over a period of time but also
enables them in decision making and policy and financial designing process.


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  • Answered by Ekta Mehta
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