Which statement is true of ratio analysis:
A) can provide useful information on a firm's current position but should never be used to forecast future performance.
B) can provide useful information on a firm's current position and hint at future performance.
C) can provide useful information on a firm's past but not current position.
D) can provide useful information on a firm's past and current position, but should never be used to forecast future performance.

Question

Quizplus · Accepted Answer

Ratio analysis can provide insights into a firm's current financial health and, while not predictive, can suggest trends that might hint at future performance.

Which Statement Is True of Ratio Analysis