"The amount of information in the accounting reports is so overwhelming that I cannot understand it," said Ron to his division manager, Stan. "Yes," said Stan, "The sheer volume of the numbers in the reports is daunting. That's why we have decided that an effective approach for checking our firm's overall performance is to use ________, which indicate strengths and weaknesses."
A) profit and loss statements
B) key financial ratios
C) assets
D) liabilities
E) balance sheets

Question

Quizplus · Accepted Answer

Key financial ratios are a more effective approach for checking a firm's overall performance as they provide specific information by comparing different financial elements. Profit and loss statements, assets, liabilities, and balance sheets may provide overwhelming information and may not be as useful for analyzing overall performance.

"The Amount of Information in the Accounting Reports Is So