Financial ratios:
A)help financial statement users to evaluate the financial characteristics of companies by putting the large dollar amounts reported in financial statements into relative terms for comparison purposes.
B)provide for a more meaningful analysis when the trends of financial ratios for a company are compared to the industry average trends over a period of time.
C)Both of these statements are true.
D)Neither of these statements is true.

Question

Quizplus · Accepted Answer

Financial ratios are used to evaluate financial characteristics by comparing large dollar amounts in relative terms and are more meaningful when compared to industry averages over time.

Financial Ratios