The analyst should be careful when evaluating ratios that
A) audited statements are used.
B) the dates of the financial statements being compared are the same.
C) the overall performance of the firm is not judged on a single ratio.
D) all of the above.

Question

Quizplus · Accepted Answer

The analyst should be careful when evaluating ratios only if he/she uses audited financial statements, compares financial statements of the same date, and judges the overall performance of the firm based on multiple ratios, and not just a single ratio. Therefore, all the options mentioned in choices A, B, and C are correct.

The Analyst Should Be Careful When Evaluating Ratios That