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Chapter 3 discusses financial statements and ratio analysis and demonstrates how we can use ratios, trend analysis, and benchmarking to draw conclusions about the financial

Chapter 3 discusses financial statements and ratio analysis and demonstrates how we can use ratios, trend analysis, and benchmarking to draw conclusions about the financial health of the firm. The chapter also lists 6 cautions about using ratio analysis. Pick 1 of the 6 cautions discussed in the chapter and briefly state your understanding of the caution and why you think this is an important consideration. How might ignoring this caution cause an incorrect conclusion about the firm

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