Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need help finding 3 limitations for ratio amalysis Topic: Ratio Analysis Ratio analysis is important for a company to keep a close eye on

I need help finding 3 limitations for ratio amalysis
image text in transcribed
Topic: Ratio Analysis Ratio analysis is important for a company to keep a close eye on what is happening within their organization. It can bring to attention any weaknesses or strengths that may be evolving. It is important when there is a red flag of weakness that it is investigated to determine what must be repaired to bring it back to the positive. The information used in ratio analysis comes from the financial statements, and if that information is not true to what is really happening, this will result in erroneous ratios being analyzed. When performing a company analysis, you have to assume that the given information is true and correct. If it is not, this could affect the company's bottom line. Discuss at least three limitations of ratio analysis

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

New Models Of Financing And Financial Reporting For European SMEs

Authors: Eva Kaili , Dimitrios Psarrakis, Raz Van Hoinaru

1st Edition

3030028305, 3030028313, 9783030028305, 9783030028312

More Books

Students also viewed these Accounting questions

Question

Show that For n ¥ r ¥ 1. Cnr-1

Answered: 1 week ago

Question

What are the objectives of performance appraisal ?

Answered: 1 week ago

Question

State the uses of job description.

Answered: 1 week ago

Question

Explain in detail the different methods of performance appraisal .

Answered: 1 week ago