Although ratios can provide valuable information, they can also be misleading for the following reason(s):
A) ratios are only as reliable as the accounting data on which they are based.
B) compilation of industry norms often do not report information about the distribution of values.
C) comparative analysis depends on the availability of data for appropriately defined industries.
D) all of the above are correct.

Question

Quizplus · Accepted Answer

All of the above options are correct. Ratios are dependent on the accuracy of the accounting data used to calculate them, industry norms may not fully represent the distribution of values, and comparative analysis requires appropriate industry data.

Although Ratios Can Provide Valuable Information, They Can Also Be