Which of the Following Is NOT a Reason Why Financial

question 51

Multiple Choice

Which of the following is NOT a reason why financial analysts use ratio analysis?

• A) Ratios help to pinpoint a firm's strengths.
• B) Ratios restate accounting data in relative terms.
• C) Ratios are ideal for smoothing out the differences that may exist when comparing firms that use different accounting practices.
• D) Some of a firm's weaknesses can be identified through the usage of ratios.

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Definitions:

Planned Method

A systematic, pre-determined approach or strategy designed to achieve specific goals or outcomes.

Companywide

Pertains to policies, practices, or actions affecting an entire organization.

Systematic Method

An organized, structured, and logical approach to problem-solving or investigation, following a specific sequence of steps.

Personal Changes

Adjustments or transformations in one's life or circumstances that affect the individual personally.