When calculating a ratio that uses period data and point-in-time data,analysts typically use the:
A)average value for the period data.
B)starting point for the point-in-time data.
C)ending point for the period data.
D)average value for the point-in-time data.

Question

Quizplus · Accepted Answer

When calculating a ratio that uses both period data and point-in-time data, it is best to use the average value for the point-in-time data. This is because the point-in-time data represents a snapshot of a particular moment, whereas the period data represents an average over a period of time. Using the average value for the point-in-time data helps to ensure that the ratio is comparable across the entire period.

When Calculating a Ratio That Uses Period Data and Point-In-Time