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.
E)none of the above

Question

Quizplus · Accepted Answer

It is important for an analyst to look at multiple ratios and not judge the overall performance of a firm based on a single ratio. Using only one ratio can give a distorted picture and may not accurately represent the true financial health of the company.

An Analyst Should Be Careful When Conducting Ratio Analysis to Ensure