Which of the Following Is a Limitation Related to the Usage

question 8

Multiple Choice

Which of the following is a limitation related to the usage of ratios when reviewing a firm's performance?

• A)Ratios reveal differences in policy and performance between years.
• B)Ratios can be used to compare firms that are in the same industry if one firm's sales are higher than another firm.
• C)Financial ratios are designed for the use of creditors,not for managers.
• D)Different accounting practices between firms can distort comparisons.

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Definitions:

Reminiscences

Refers to the act of recalling past experiences or events, usually imbued with a sense of nostalgia or personal reflection.

Atrial Dysrhythmias

Abnormal heart rhythms originating from the atria, including conditions like atrial fibrillation or atrial flutter.

Pitting Edema

A condition characterized by swelling in which pressure applied to the skin leaves a temporary indentation or pit, often seen in limbs.

Varicosities

Abnormally enlarged veins, commonly appearing in the legs, which occur when veins become overfilled with blood.