Ratio analysis ________.
A) cannot be used to evaluate a company's financial condition
B) is used most effectively to compare a company against other companies in the same industry and to denote trends within the company
C) cannot be used to compare a company against other companies in the same industry because the necessary information is not available
D) cannot be used to evaluate a company's performance

Question

Quizplus · Accepted Answer

Ratio analysis is most effectively used to compare a company against other companies in the same industry and to denote trends within the company. It provides valuable insights into a company's financial health, performance, and profitability. While it should not be the sole basis for investment decisions, ratio analysis is an important tool for investors, analysts, and managers to understand a company's financial position.

Ratio Analysis ________