Ratios Are Used as Tools in Financial Analysis

question 192

Multiple Choice

Ratios are used as tools in financial analysis

• A) instead of horizontal and vertical analyses.
• B) because they can provide information that may not be apparent from inspection of the individual components of the financial statements.
• C) because even single ratios by themselves are quite meaningful.
• D) because they are prescribed by GAAP.

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Definitions:

Frustration-Regression Principle

A concept suggesting that when a higher-level need is frustrated, individuals may regress to lower-level needs that are easier to satisfy.

Reactivated Need

A previously satisfied need that becomes active again due to changes in circumstances or environment.

Esteem Needs

Esteem needs are a human's desire for respect, self-esteem, and recognition from others, as posited in Maslow's hierarchy of needs.

Promotion

The act of raising someone to a higher position or rank, often accompanied by increased responsibilities and benefits.