Financial ratios provide key insights into how a firm compares to other firms in its industry in the important areas of liquidity,debt,profitability and businesses activity.

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This statement is true. Financial ratios can be used to compare a firm's performance in important areas such as liquidity, debt, profitability, and business activity with industry standards and other firms in the same industry. These ratios help in understanding a company's financial health and identifying areas for improvement.

Financial Ratios Provide Key Insights into How a Firm Compares