Which of the Following Statements About a Ratio Is NOT

question 45

Multiple Choice

Which of the following statements about a ratio is NOT true?

• A) If the financial statements are materially misstated,then ratios will be misleading.
• B) A ratio is always expressed as a percentage.
• C) A ratio can be interpreted and used meaningfully only with a good understanding of the company.
• D) Ratios are indicators that can be interpreted.

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Definitions:

Foreign Exchange Loss

A loss resulting from the devaluation of the home currency against a foreign currency in transactions.

Forward Exchange Contract

A financial agreement to exchange a set amount of currencies at a specified rate on a predetermined future date.

Cash Flow Hedge

A financial risk management tool aimed at safeguarding against variances in cash inflows and outflows due to market volatilities.

Amortized

Amortization involves spreading payments over multiple periods, such as loans or intangible assets, to reduce the balance over time.