Which of the following is an objective of ratio analysis?
A)Assessing past performance.
B)Assessing the prospects for future performance.
C)Analyzing how a company finances its operations.
D)All of these answer choices are correct.

Question

Quizplus · Accepted Answer

Ratio analysis is used for all of the given objectives. It helps in analyzing past performance by comparing ratios of different periods, assessing the prospects for future performance by projecting ratios based on past trends, and analyzing how a company finances its operations by looking at its liquidity, profitability and solvency ratios.

Which of the Following Is an Objective of Ratio Analysis