Which of the Following Is NOT a Limitation Related to the Usage

question 34

Multiple Choice

Which of the following is NOT a limitation related to the usage of ratios when reviewing a firm's performance?

• A)Many firms experience seasonality in their operations.
• B)Ratios cannot be used to compare firms that are in the same industry if one firm's sales are higher than another firm's.
• C)Some firms operate in a variety of business lines,which makes it difficult to make comparisons.
• D)Accounting practices differ widely among firms.

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Definitions:

Observations

Data points or pieces of information gathered through the senses or instruments during an experiment or study.

Bell-Shaped

Describes the symmetric shape of a distribution that is highest in the middle and tapers off towards both ends, characteristic of a normal distribution.

Tchebysheff's Theorem

A statistical rule stating that for any set of data, regardless of distribution, a certain percentage of values will fall within a specific number of standard deviations from the mean.

Tchebysheff's Theorem

A statistical theorem stating that for any set of data, the proportion of results that lie within a certain number of standard deviations from the mean is at least 1-1/k^2, for k>1.