Financial ratios
I.allow comparisons across firms without concern over firm size.
II.can compare a firm's operating and financial status to industry norms.
III.reflect the future outlook of a firm based on analysts projections.
IV.look at the liquidity, activity, leverage, profitability and market measures of a firm.
A) II and IV only
B) I and II only
C) I, II and IV only
D) I, II, III and IV

Question

Quizplus · Accepted Answer

Financial ratios allow for comparisons across firms without concern over firm size, as well as the ability to compare a firm's operating and financial status to industry norms. They also look at the liquidity, activity, leverage, profitability, and market measures of a firm. However, they do not reflect the future outlook of a firm based on analysts' projections, so option III is not correct. Therefore, the best choice is C, which includes options I, II, and IV.

Financial Ratios I.allow Comparisons Across Firms Without Concern Over Firm Size