Which Is True? Ratio Analysis

question 37

Multiple Choice

Which is true? Ratio analysis

• A)can provide useful information on a firm's current position but should never be used to forecast future performance.
• B)can provide useful information on a firm's current position and hint at future performance.
• C)can provide useful information on a firm's past but not current position.
• D)can provide useful information on a firm's past and current position, but should never be used to forecast future performance.

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Definitions:

Second Class of Stock

A category of shares that have different rights and privileges than the primary class of stock in a company, often with different voting or dividend rights.

Unequal Voting Rights

A situation where shares are divided into classes, each with varying degrees of voting power in the company's decisions.

Lower Priority

A status indicating that a task or obligation is considered less important or urgent compared to others and can be addressed or fulfilled later.

Common Shares

Equity securities representing ownership in a company, entitling the holder to vote on corporate matters and share in the company’s profits.