Which statement concerning financial ratios is not true?
A) A ratio expresses the relationship between two figures appearing in the financial statements.
B) Ratios are easy to interpret but difficult to calculate.
C) Ratios adjust for scale of operations and allow comparisons between businesses of different sizes.
D) None of the above, i.e., all are true statements.

Question

Quizplus · Accepted Answer

Ratios can be easy or difficult to calculate, depending on the complexity of the formula involved. However, they can be more difficult to interpret, especially when used in isolation without a benchmark or industry standard.

Which Statement Concerning Financial Ratios Is Not True