Which of These Are Limitations of Financial Analysis

question 4

Multiple Choice

Which of these are limitations of financial analysis?
I. Use of historical data
II. Invalid comparisons
III. Ratio results often contain errors in calculations
IV. Historical cost financial reports are not adjusted for inflation
V. Non-quantitative factors are not considered

• A) I, II, III and IV only
• B) I, II, III and V only
• C) I, II, IV and V only
• D) I, II, III, IV and V

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Definitions:

Capacity Building

The process of developing and strengthening the skills, instincts, abilities, processes, and resources that organizations and communities need to survive, adapt, and thrive.

Managing Risk

The process of identifying, assessing, and prioritizing risks followed by coordinated efforts to minimize, monitor, and control the probability or impact of unfortunate events.

Quantified Targets

Specific, measurable goals set by an organization or project, often expressed in numerical terms, to track performance and progress.

Objectives

Specific, measurable goals that an organization or individual aims to achieve within a set timeframe.