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) are required reporting disclosures in the notes to the consolidated financial statements of U.S. companies that are regulated by the SEC.
D)All of the above statements are true.
E) A and B are true, but C is not true.

Question

Quizplus · Accepted Answer

Financial ratios help in evaluating financial characteristics and are useful for comparison with industry averages, but they are not required disclosures in SEC-regulated financial statements.

Financial Ratios