Why do analysts rely on financial statement ratio analysis?
A)It enables them to determine the size of the company.
B)It enables them to determine how well a company performed given the resources available to it.
C)It enables them to determine the future performance of the company stock.
D)It enables them to determine the role of the company's management.

Question

Quizplus · Accepted Answer

Financial statement ratio analysis helps analysts to measure various aspects of a company's performance against its available resources. It helps in identifying the company's strengths and weaknesses, and the overall financial health of the organization. It also enables analysts to compare the company's performance with that of its competitors in the same industry. However, it may not necessarily predict the future performance of the company or determine the role of the company's management.

Why Do Analysts Rely on Financial Statement Ratio Analysis