Each of the following is true of successful financial ratio analysis EXCEPT ____.
A) some industries use special ratios that are unique to the activities of firms in those industries
B) a single ratio is all that is needed to indicate specific areas of weakness that must be addressed
C) ratios are meaningful only when compared to a standard
D) ratios must be used in conjunction with other data to obtain meaningful information

Question

Quizplus · Accepted Answer

Financial ratio analysis requires multiple ratios and comparison to industry standards, as well as other data and contextual factors, to accurately assess a company's financial health. A single ratio is not sufficient to identify weaknesses or areas for improvement.

Each of the Following Is True of Successful Financial Ratio