Limitations of financial ratio analysis may include which of the following?
A) Cash basis of accounting is used to prepare the income statement
B) Market values are used to value assets on the balance sheet
C) Balance sheets are not prepared at the same time each year
D) All of the above

Question

Quizplus · Accepted Answer

Financial ratio analysis can be limited by various accounting practices and timing issues, including the use of cash basis accounting for the income statement, the valuation of assets at market values on the balance sheet, and inconsistencies in the timing of balance sheet preparation.

Limitations of Financial Ratio Analysis May Include Which of the Following