From the balance sheet of a company, it is possible to
- Ajudge the extent of profitability of the company
- Bassess the profitability and size of the company
- Cdetermine the size and composition of the assets and liabilities of the companyCorrect
- Ddetermine the market share, debts and assets of the company
Explanation
The correct answer is C because a balance sheet is a financial statement that reports a company’s assets, liabilities, and shareholders’ equity at a specific point in time. It is designed to show what the company owns and what it owes, thereby revealing the exact size and composition of its financial standing.
Profitability, mentioned in options A and B, is primarily judged using the Income Statement or Profit and Loss Account, not the balance sheet. While a balance sheet lists debts and assets, it does not provide information regarding market share, which makes option D incorrect. Therefore, the primary function of a balance sheet is to provide a snapshot of the company’s assets and liabilities.
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