Which of These Is a Limitation of Financial Ratio Analysis

question 60

Multiple Choice

Which of these is a limitation of financial ratio analysis?

• A)Suitable yardsticks for comparisons are not always available.
• B)Ratios have a restricted vision as they only assess the past.
• C)Year-end data is not necessarily typical of the position during the year.
• D)All of the above.

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Definitions:

Wealthy

Refers to individuals or entities possessing significant amounts of financial resources, assets, or high net worth.

Underclass

Refers to a segment of the population that occupies the lowest possible position in a class hierarchy, often characterized by poverty, lack of employment, and educational opportunities.

Ostracized

Excluded, shunned, or banished from a society or group, often used as a form of social punishment.

Poverty

A condition where an individual or community lacks the financial resources to meet basic needs such as food, shelter, and healthcare.