Which of the Following Is a Limitation of Ratio Analysis

question 96

Multiple Choice

Which of the following is a limitation of ratio analysis?

• A)Financial ratios cannot be used to assess a firm's profitability.
• B)Ratios that reveal large deviations from the norm merely indicate the possibility of a problem.
• C)It is difficult to access audited financial statements for ratio analysis.
• D)Ratio analysis assumes that inflation has no effect on a firm's business.

Interpret and compare unemployment data and labor-force participation rates among different demographic groups.

Comprehend the natural rate of unemployment, cyclical unemployment, and their determinants.

Explain how unemployment measures are conducted and the issues related to interpreting these measures.

Understand the impact of sectoral shocks and technological changes on labor markets and unemployment.

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Definitions:

Base Year

A reference year against which economic growth or inflation is measured, often using indices in real GDP calculations or price levels.

Structural Unemployment

A form of unemployment caused by a mismatch between the skills that workers offer and the skills demanded by employers, often due to technological changes or shifts in the economy.

Computer-Operated Machines

Computer-Operated Machines are devices controlled by computers to perform various tasks, increasing efficiency and precision in manufacturing and other industries.

Structural Unemployment

Occurs when there is a mismatch between the skills that workers in the economy can offer and the skills demanded by employers.