briefly explain any three limitation of ratio analysis.
Answers
Answered by
0
Explanation:
Some of the most important limitations of ratio analysis include: ... Therefore, ratio analysis metrics do not necessarily represent future company performance. Inflationary effects: Financial statements are released periodically and, therefore, there are time differences between each release. If inflation.
Answered by
2
Limitations of Ratio Analysis
The firm can make some year-end changes to their financial statements, to improve their ratios. ... Ratios ignore the price level changes due to inflation. Many ratios are calculated using historical costs, and they overlook the changes in price level between the periods.
Similar questions