Ratio analysis involves analyzing financial statements in order to appraise a firm's financial position and strength.

Question

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Ratio analysis is a technique used to evaluate a company's financial performance by analyzing its financial statements, including the balance sheet, income statement, and cash flow statement. By calculating and interpreting key ratios, such as liquidity ratios, profitability ratios, and solvency ratios, analysts can get a clearer picture of a company's financial position and strength. Therefore, the given statement is true.

Ratio Analysis Involves Analyzing Financial Statements in Order to Appraise