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Questions and Answers
Financial statements provide current information that can be used to predict future trends.
False
Different accounting policies can make it easy to compare financial ratios of two firms.
False
Ideal ratios can be fixed for all firms, regardless of their financial conditions.
False
Ratios are a comprehensive tool of analysis that considers both quantitative and qualitative factors.
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Window-dressing is a technique used to present financial statements in a clearer and more concise manner.
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Changes in price level are automatically reflected in financial statements.
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Financial statements can be used to compare the financial position of two firms across different time periods.
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Ratios are useful in predicting the future performance of a firm.
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Accounting policies have no impact on the computation of financial ratios.
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Financial statements provide a comprehensive picture of a firm's financial position.
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