(a) The process of identifying the financial strengths and weaknesses of the firm by properly establishing relationships between the various items of Balance Sheet and the Statement of Profit and Loss is called :
(A) Comparative Statement Analysis
(B) Cash Flow Analysis
(C) Financial Analysis
(D) Common Size Analysis
OR
(b) Ratios calculated to measure the ability of the business to pay the amount due to stakeholders as and when it is due are known as :
(A) Solvency ratios
(B) Liquidity ratios
(C) Activity ratios
(D) Profitability ratios
1 mark· Analysis of Financial Statements· Meaning of Financial Statement Analysis / Solvency Ratios