One Problem with Ratio Analysis Is That Relationships Can Be

question 96

True/False

One problem with ratio analysis is that relationships can be manipulated.For example, we know that if our current ratio is less than 1.0, then using some of our cash to pay off some of our current liabilities would cause the current ratio to increase and thus make the firm look stronger.

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Definitions:

Critical Incident Diaries

A method for recording and analyzing significant occurrences to improve decision-making and problem-solving in organizations.

Job Performance Criteria

Standards or metrics used to evaluate an employee's effectiveness, efficiency, and productivity in fulfilling their job responsibilities.

Performance Measurements

Quantitative assessments that gauge the efficiency, effectiveness, or outcome of a process or individual's activities.

Feedback

Information or reactions received about a person's performance of a task, used as basis for improvement.