Absolute values taken from financial statements are more useful than relative values.

Question

Quizplus · Accepted Answer

Relative values, such as ratios and percentages, can provide a better understanding of a company's financial performance and position than absolute values alone. For example, comparing a company's current ratio (a relative value) to industry benchmarks can indicate whether the company has a strong liquidity position or not. However, absolute values can still be important in providing context and understanding the magnitude of certain amounts, such as total assets or liabilities.

Absolute Values Taken from Financial Statements Are More Useful Than