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 affect while comparing older to newer firms

Question

Quizplus · Accepted Answer

The right interpretation of the ratio value is crucial when analyzing ratios to ensure accurate analysis and decision-making. Pre-audited statements are not necessarily an issue as long as the analyst is aware of the limitations of unaudited statements. Comparing financial data that is not uniform or adjusting for inflation is also important in ratio analysis, but not as critical as ensuring the correct interpretation of the ratio value.

The Analyst Should Be Careful When Analyzing Ratios That ________