When using ratio data for comparison to other companies, analysts should: not interpret the data as a way of determining which companies will survive and outperform others. only use data from one time period. not assume that all companies in the industry are in direct competition. use industry averages, rather than individual companies, for the comparison.

Ratio analysis is a method used to know the efficiency, liquidity and profitability of a company by…

Answered: When using ratio data for comparison to…

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter15: Ratio Analysis (ratioa)

Section: Chapter Questions

Problem 3R: a. What information does a comparison of the current ratio and acid test ratio provide? b. Is the...

See similar textbooks

Related questions

Question

When using ratio data for comparison to other companies, analysts should:

		not interpret the data as a way of determining which companies will survive and outperform others.
		only use data from one time period.
		not assume that all companies in the industry are in direct competition.
		use industry averages, rather than individual companies, for the comparison.

Expert Solution

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions