The instrument used in analysis and interpretation of financial statement is the?

A. accounting ratios
B. income and expenditure extract
C. balance sheet extract
D. found accounting

Correct Answer:

Option A – accounting ratios

Explanation

Accounting ratio is the comparison of two or more financial data which are used for analyzing the financial statements of companies. It is an effective tool used by the shareholders, creditors and all kinds of stakeholders to understand the profitability, strength and financial status of companies.