Question

Q14 Which of the following is not true for a private company?

Select one:

a. It is a common form of business structure for large-sized entities.

b. The company name includes the words 'Pty Ltd'.

c. It can have up to 50 shareholders.

d. It is relatively easy to set up.

Q15 How can financial analysis be categorised?

Select one:

a. As ratio analysis

b. As trend analysis

c. As vertical and horizontal analysis

d. All options are correct

Answer 1

Solution. Q14. The correct answer is option c

Explanation: Option a, b, d are all valid for a private company as it forms large-sized entities and includes 'Pty Ltd' at the end and easier to set up held under private ownership. Option c holds true for the given question as it holds false as a private company can have maximum of 200 shareholders and not 50.

Q15. The correct answer is option c

Explanation: For an organization, financial analysis can be categorised as horizontal analysis, vertical analysis, short-term analysis, valuation analysis, etcetera encompassing financial data to determine financial performance. Option c holds true for the given question, other options hold false. Ratio analysis provides comparison of line data and reportings are provided in ratios, whereas trend analysis encompasses past data to provide base for future estimation.