Proper interpretation of accounting ratios requires:
A)Comparison with competitors
B)Analysing trends over 5 years or so
C)An understanding of the business and industry
D)All of the above

Question

Quizplus · Accepted Answer

Proper interpretation of accounting ratios requires a combination of all the given options. Comparison with competitors helps to understand the company's position relative to competitors. Analyzing trends over a period of time gives a broader perspective on the company's financial health. Finally, understanding the business and industry provides insights into the factors impacting the financial performance of the company.

Proper Interpretation of Accounting Ratios Requires