In your view which of the following statements are correct and which are not? Please explain your points of view:

1. Ratio analysis that focuses on potential areas of concern always provide a definite evidence of the problem.

2. A trained analyst can judge the overall performance of a firm by focusing on a single ratio. Typically, it is a waste of time and resources to calculate additional categories of ratios.

3. Results can be distorted by inflation, which can cause the book values of inventory and depreciable assets to differ greatly from their true replacement values.