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:

Inattention

The lack of focus or concentration on a task or environment.

Low Tolerance

A minimal level of patience or ability to endure something, especially discomfort, opposing opinions, or behaviors.

Inappropriate Activity

Actions or behaviors that are not suitable or proper in a given context or situation.

Intelligence

The capacity to understand the world, think with rationality, and use resources effectively when faced with challenges.