An analyst should be careful when conducting ratio analysis to ensure that
A) the overall performance of the firm is not judged on a single ratio.
B) the dates of the financial statements being compared are different.
C) audited statements are not being used.
D) different accounting procedures are used.

Question

Quizplus · Accepted Answer

It is important for an analyst to look at multiple ratios and not rely on a single ratio to judge the overall performance of a firm. Using only a single ratio can lead to an inaccurate assessment of the company's financial health.

An Analyst Should Be Careful When Conducting Ratio Analysis to Ensure