The use of market value balance sheets serves to correct a weakness of ratio analysis.

Name: The use of market value balance sheets serves to correct a weakness of ratio analysis.
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Question

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Market value balance sheets use current market values for assets and liabilities, which may be more informative than historical cost-based balance sheets used in ratio analysis. This can provide a more accurate picture of a company's financial health, particularly in terms of its ability to generate returns for shareholders.

The Use of Market Value Balance Sheets Serves to Correct