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:

Judicial System

The system of courts that interprets and applies the law in the name of the state or country.

Appeals

The process of asking a higher authority or court to review and change the outcome of a decision.

Dominance Structuring

The psychological process through which humans achieve confidence in their decisions. The four phases of dominance structuring are pre-editing, identifying one promising option, testing that promising option for dominance, and structuring the dominance of the option selected.

Psychological Process

Pertains to the cognitive, emotional, and behavioral functions and activities of the mind.