Using financial analysis to assist users in answering the 'why' questions requires a thorough understanding of:
A) ratio measurements only.
B) preparation of the financial statements only.
C) all ratio measurements and how they interrelate.
D) only some of the ratio measurements.

Question

Quizplus · Accepted Answer

In order to answer the 'why' questions using financial analysis, a thorough understanding of all ratio measurements and how they interrelate is necessary. This is because different ratios provide different insights into a company's financial performance, and it's important to analyze them together to get a complete picture of the company's financial health. Simply knowing how to prepare financial statements or having knowledge of only some of the ratio measurements is not sufficient for answering 'why' questions through financial analysis.

Using Financial Analysis to Assist Users in Answering the 'Why