All of These Are Limitations of Financial Ratio Analysis Except

question 54

Multiple Choice

All of these are limitations of financial ratio analysis except:

• A) suitable yardsticks may not be available with which to compare results.
• B) excessive information disclosed in company annual reports.
• C) year-end data is not necessarily typical of the position during the year.
• D) it is past performance that is being analysed.

---

Definitions:

Activist Investors

Investors, often holding significant stock in a company, who seek to effect change within the company by influencing its management and policies.

Shareholders

Individuals or institutions that own one or more shares of stock in a public company, making them partial owners of the company.

Reinvesting

The process of using dividends, interest, or profits from investments to purchase additional shares or units instead of taking the earnings as cash.

Activist Investors

Investors who use their equity stake in a corporation to influence its management or operations, often pushing for financial or structural changes.