You work as an analyst at a credit-rating agency, and you are comparing firms in the construction and engineering sector. One company in the portfolio of companies you are analyzing is a Chinese firm. This firm stands out in the ratio analysis, because the company's financial ratios are substantially lower than identical financial ratios of the other forms in the sector. You do not dissect the results of the ratio analysis and categorize report this firm as an under-performing company Which of the following statements about your analysis report is true? The ratio provide an accurate and through representation of the Chinese company's performance the analysis likely includes incorrect and misleading conclusions Most decision makers and analysts use five groups of ratios to examine the different aspects of a company's performance. Indicate whether each of the following statements regarding financial ratios are true or false? A company exhibiting a high liquidity ratio means it is likely to have enough resource to pay off its short-term obligation Asset management or activity ratios provide insights into management's efficiency in using a firm's working capital and long-term assets Debt or financial leverage ratio help analysts determine whether a company has sufficient cash to repay its short-term debt obligation One possible explanation for an increase in a firm's profitability ratios over a certain time span is that the company's income has increased Market-value or market-based ratios help analysts figure out what investors and the markets think about the firm's growth prospects or current and future operational performance which of the following statement represent a weakness or limitation of ratio analysis? Check all that apply Seasonal factors can distort data window dressing might be in effect Market data is not sufficiently considered