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Discuss the Limitations of Financial Ratio Analysis

question 117

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Discuss the limitations of financial ratio analysis.


Definitions:

Crystal Ball

In a figurative sense, a tool or method used to predict future events or outcomes, often associated with uncertainty.

Sensitivity Information

Data that reveals how changes in input variables affect the outcome of a model or system, often used in the context of risk analysis.

Cumulative Profit

The total amount of profit or loss generated over a specific period of time, taking into account all revenues and expenses up to that point.

Probability

A statistical measure representing the chance or likelihood that a particular event will happen, expressed as a fraction or percentage.

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