Financial Ratios

question 30

Multiple Choice

Financial ratios:

• A)help financial statement users to evaluate the financial characteristics of companies by putting the large dollar amounts reported in financial statements into relative terms for comparison purposes.
• B)provide for a more meaningful analysis when the trends of financial ratios for a company are compared to the industry average trends over a period of time.
• C)Both of these statements are true.
• D)Neither of these statements is true.

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Definitions:

True Value

The actual or real value of a parameter which is estimated in a study.

Sample Size

The number of individual observations or data points collected in a sample from a larger population.

ANOVA

A statistical method, short for Analysis of Variance, that assesses potential differences in means among multiple groups.

Assumptions

Assumptions are accepted truths or beliefs that are taken for granted without proof, used as a basis for reasoning, discussions, or theoretical modeling.