Ratio analysis ________.
A)provides a year-to year comparison of a company's performance in different periods
B)is used most effectively to measure a company against other companies in the same industry and to denote trends within the company
C)cannot be used to measure a company against other companies in the same industry because the necessary information is not available
D)provides a way to compare different companies

Question

Quizplus · Accepted Answer

Ratio analysis is best used to measure a company against other companies in the same industry and to denote trends within the company. While it also provides a year-to-year comparison of a company's performance in different periods, this is not its primary purpose. Additionally, it can be used to compare different companies, but it is most effective when comparing companies within the same industry. Therefore, option B is the most accurate answer.

Ratio Analysis ________