The analyst should be careful when analyzing ratios that ________.
A) pre-audited statements are used
B) right interpretation of the ratio value is made
C) financial data being compared need not be uniform
D) inflation will not effect while comparing older to newer firms

Question

Quizplus · Accepted Answer

Proper interpretation of ratio values is crucial for accurate analysis. The analyst should understand the financial data being used and ensure that it is consistent across the firms being compared to make informed decisions. Pre-audited statements may have errors that could affect the ratios, and inflation must be accounted for while comparing data across different periods.

The Analyst Should Be Careful When Analyzing Ratios That ________