- Not a Substitute of Judgement. ...
- Based on Past Data. ...
- Problem in Comparability. ...
- Reliability of Figures. ...
- Various methods of Accounting and Financing. ...
- Change in Accounting Methods. ...
- Changes in the Value of Money. ...
- Limitations of the Tools Application for Analysis.
What are the disadvantages of financial accounting?
- No Clear Idea of Operating Efficiency: ...
- Weakness not Spotted Out by Collective Results: ...
- Not Helpful in the Price Fixation: ...
- No Classification of Expenses and Accounts: ...
- No Data for Comparison and Decision-making: ...
- No Control on Cost: ...
- No Standards to Assess the Performance:
What is the advantages of financial statement analysis?
It provides internal and external stakeholders with the opportunity to make informed decisions regarding investing. Financial statement analysis also provides lending institutions with an unbiased view of a business's financial health, which is helpful for making lending decisions.
What is financial statement analysis and its limitations?
The analysis financial statement provides the necessary information which is required by the users of the financial statement, but it has some limitations which include non-comparability of the financial statement across different companies due to adoption of different accounting policies and procedures, non-adjustment ...
What are the benefits of financial statement analysis?