Q.Analysis conducted by outside parties such as banks, creditors and investors, who do not have access to the firm's detailed internal records and who rely only on the published financial statements, is called ________.

The classification here is by WHO is doing the analysing, not by which method they use.

This question tests the WHO-performs-it classification, not the WHAT-method classification.

1. Internal Analysis is wrong — it is analysis done by persons WITH access to the firm's internal records (management, internal auditors), the opposite of what the question describes.
2. External Analysis is correct — banks, creditors and investors are outside parties with no access to internal books, who rely entirely on the firm's published financial statements. This is exactly External Analysis.
3. Horizontal Analysis is wrong — that term describes a METHOD (comparing the same item across years), not WHO is performing the analysis; an internal analyst could also use horizontal analysis.
4. Vertical Analysis is wrong for the same reason as (c) — it is a method (comparing different items within one year against a base), independent of whether the analyst is internal or external.
   ✓Final answer

   (b) External Analysis — analysis performed by outside parties (banks, creditors, investors) who rely only on the published financial statements, having no access to the firm's internal records.

Students often confuse the WHO classification (Internal vs External) with the METHOD classification (Horizontal vs Vertical) — these are two entirely separate, independent classifications of the SAME analysis, and a question naming 'outsiders with no internal access' is always testing Internal vs External, never Horizontal vs Vertical.