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

Question

Quizplus · Accepted Answer

All of the options mentioned are limitations of financial ratio analysis. Year-end data might not represent the financial position of a company throughout the entire year, suitable comparisons might not always be available, and ratios only provide a view of the past and cannot predict future performance.

Which of These Is a Limitation of Financial Ratio Analysis