Successful financial ratio analysis requires all of the following EXCEPT:
A)Some industries use special ratios that are unique to each company.
B)A single ratio is all that is needed to indicate specific areas of weakness that must be addressed.
C)Ratios are meaningful only when it is compared to a standard.
D)Ratios must be used in conjunction with other data to obtain meaningful information.

Question

Quizplus · Accepted Answer

Successful financial ratio analysis requires multiple ratios to be evaluated and compared to industry standards or benchmarks, as well as considering other relevant financial and non-financial data. Relying on a single ratio can lead to incorrect conclusions and ineffective decision-making. Additionally, some industries may have unique or specialized ratios that must be considered.

Successful Financial Ratio Analysis Requires All of the Following EXCEPT