An analyst should be careful when conducting ratio analysis to ensure that ________.
A) the overall performance of a firm is not judged on a single ratio
B) the role of inflation is ignored
C) ratios being compared should be calculated using financial statements dated at different points in time during the year
D) different accounting procedures are used

Question

Quizplus · Accepted Answer

It is important for an analyst to not solely rely on a single ratio to judge the overall performance of a firm. They should consider a range of ratios and other factors before reaching a conclusion.

An Analyst Should Be Careful When Conducting Ratio Analysis to Ensure