What is the purpose of ratio analyses of financial statements?
A)to gauge the franchise's profit potential
B)to asses the franchisor or franchisee's management skills
C)to determine the success of the franchise in meeting its overall objectives
D)to measure the exact worth of a franchise

Question

Quizplus · Accepted Answer

The general purpose of ratio analyses of financial statements is to determine the success of the franchise in meeting its overall business objectives.These objectives are to meet current obligations and to meet interest costs and repayment of long-term obligations while earning a specific return on invested funds.

What Is the Purpose of Ratio Analyses of Financial Statements