Performing financial ratio analyses enables a business owner to identify problems early-before they become crises.

Question

Quizplus · Accepted Answer

Financial ratio analysis helps in identifying problems such as liquidity issues, low profitability, high debt levels at an early stage. This helps the business owner to take corrective actions and prevent it from becoming a major crisis. Therefore, the statement is true.

Performing Financial Ratio Analyses Enables a Business Owner to Identify