What Are Some Potential Pitfalls of Ratio Analysis Based on Accounting

question 9

Essay

What are some potential pitfalls of ratio analysis based on accounting data?

---

Definitions:

Innate

Inborn or natural characteristics or abilities not acquired or learned.

John Locke

John Locke was a 17th-century English philosopher and political theorist who laid much of the groundwork for the Enlightenment, emphasizing the rights of individuals and the notion of a social contract.

Experience

The knowledge or skill acquired by a person through direct participation in events or activities, typically leading to an increase in wisdom or expertise.

Mead

A fermented beverage made from honey, water, and sometimes various fruits, spices, grains, or hops.