Which one of the following statements is correct concerning ratio analysis?
A)A single ratio is often computed differently by different individuals.
B)Ratios do not address the problem of size differences among firms.
C)Only a very limited number of ratios can be used for analytical purposes.
D)Each ratio has a specific formula that is used consistently by all analysts.
E)Ratios can not be used for comparison purposes over periods of time.

Question

Quizplus · Accepted Answer

Different individuals may use slightly different methods to compute a ratio, leading to variation in the results. However, this can be addressed by standardizing the formula used for the ratio.

Which One of the Following Statements Is Correct Concerning Ratio