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:

Excise Tax

A tax directly levied on certain goods, services, or activities, often included in the price of the product.

Improved Technology

Advances or enhancements in technology that lead to better efficiency, productivity, or outcomes in various fields.

Quantities Supplied

The amounts of goods or services that producers are willing and able to sell at various prices over a certain time period.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, leading to a balance in the market.