54. Which of the following statements are true about Ratio Analysis ?
(a) Ratio analysis is useful in financial analysis.
(b) Ratio analysis is not helpful in identifying weak spots of business.
(c) Ratio analysis is helpful in communication and coordination.
(d) Ratio analysis is helpful in financial planning and forecasting.
(A) (a), (c) and (d)
(B) (a), (b) and (d)
(C) (a), (b) and (c)
(D) (a), (b), (c), (d)
Answers
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Answer:
a,b,d is the correct answer
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The correct answer is option (B) (a), (b), and (d) because Ratio Analysis is helpful for financial analysis, not helpful for identifying the weak spots of the business, and also helpful in financial planning and forecasting.
What is Ratio Analysis and how it is helpful?
- Ratio Analysis is used to evaluate the overall financial analysis of an organization.
- It can compare the data of two different companies in the same industry and reveal their profitability, operational efficiency, liquidity, and solvency.
- Ratio analysis is not helpful to communicate or coordinate because it can be done only by the employees in an organization.
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