Accounting ratios are useful as management performance measures.

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Accounting ratios provide a quantitative analysis of financial data, which can be useful in evaluating management performance. Managers can use these ratios to measure their effectiveness in managing assets, liabilities, profitability, and cash flow. For example, the return on assets (ROA) ratio can indicate how effectively managers are utilizing their company's assets to generate profits. Likewise, the debt-to-equity ratio can provide insights into how well managers are managing and balancing their financial obligations. Overall, accounting ratios can help managers to identify areas that require improvement and guide their decision-making towards better performance.

Accounting Ratios Are Useful as Management Performance Measures