Select one of the limitations of ratio analysis and indicate why you believe it is a major concern.
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Ratio analysis is a popular technique of financial analysis. It is used to visualize and extract information from financial statements. It focuses on ratios that reflect the profitability, efficiency, financing leverage, and other vital information about a business. The ratios can be used for both horizontal analysis and vertical analysis. While they are a popular form of analysis, there are many limitations of ratio analysis that financial analysts should be aware of.
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