Which of the following statements about operating ratios (which can be calculated from operating statements) is TRUE?
A) By comparing operating ratios from one period to another, a firm can identify areas that may need special attention.
B) These ratios are often used for control purposes.
C) These ratios are calculated by dividing operating statement items by net sales.
D) By comparing its operating ratios with competitors' ratios, a firm may be able to obtain a better idea of how it is doing.
E) All of these statements about operating ratios are TRUE.

Question

Quizplus · Accepted Answer

By comparing operating ratios from one time period to another, a firm can identify areas that may need attention. These ratios are often used for control purposes. These ratios are calculated by dividing operating statement items by net sales. By comparing its operating ratios with competitors' ratios, a firm may be able to obtain a better idea of how it is doing. All of the above statements are true.

Which of the Following Statements About Operating Ratios (Which Can