Which of these is a limitation of financial ratio analysis?
A)Suitable yardsticks for comparisons are not always available.
B)Ratios have a restricted vision as they only assess the past.
C)Year-end data is not necessarily typical of the position during the year.
D)All of the above.

Question

Quizplus · Accepted Answer

All of the options presented are limitations of financial ratio analysis. Suitable yardsticks for comparisons may not exist for certain industries or companies, ratios only reflect past performance and may not be predictive of future results, and year-end data may not be representative of the company's financial performance throughout the year.

Which of These Is a Limitation of Financial Ratio Analysis