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How Does Ratio Analysis Relate to the Income Statement and Balance

Question 46

Multiple Choice

How does ratio analysis relate to the income statement and balance sheet?


A) It prevents interested parties from comparing an organization with similar entities.
B) It adds complexity to the simplified information in the income statement and balance sheet.
C) It makes the information from the income statement and balance sheet more abstract.
D) It eliminates the need to reference the income statement and balance sheet.
E) It brings the income statement and balance sheet into sharper focus.

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