— Kishore V, SME and ACW at Edumarz
The following are some of the limits of financial analysis:
- In the financial analysis, changes in cost price levels are not included.
- Without previous knowledge of an organization’s accounting method modifications, the financial analysis may be confusing.
- Financial analysis is a study of a company’s financial records.
- Only monetary data is evaluated in financial analysis, whereas non-monetary factors are omitted.
- The financial statements are based on accounting principles, and as a result, they do not reflect the present situation.