Ratios Are Used as Tools in Financial Analysis

question 191

Multiple Choice

Ratios are used as tools in financial analysis

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

---

Definitions:

Escape From Self-Awareness

A psychological phenomenon where individuals avoid or distract themselves from their own thoughts and feelings that cause discomfort.

Bulimia Nervosa

An eating disorder characterized by episodes of binge eating followed by compensatory behaviors such as vomiting, fasting, or excessive exercise to prevent weight gain.

Self-Induced Vomiting

A behavior commonly associated with certain eating disorders such as bulimia nervosa, where individuals intentionally provoke vomiting as a way to control weight or counteract the effects of binge eating.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a handbook used by healthcare professionals as the authoritative guide to diagnosing mental disorders.