An analyst should be careful when conducting ratio analysis to ensure that
A) the overall performance of the firm is judged on a single ratio.
B) the dates of the financial statements being compared are close in date.
C) unaudited statements are being used.
D) the same accounting procedures were used.

Question

Quizplus · Accepted Answer

The same accounting procedures should be used when conducting ratio analysis to ensure accuracy and consistency in the calculations. Using different accounting procedures can result in misleading or inaccurate ratios. Therefore, the analyst should be careful to ensure that the same accounting procedures were used in the financial statements being compared.

An Analyst Should Be Careful When Conducting Ratio Analysis to Ensure