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Questions and Answers
Which group of people typically use financial ratios?
Which group of people typically use financial ratios?
- Customers
- Accountants
- Lenders, financial analysts, and investors (correct)
- Employees
When analyzing financial statement data, what is an important factor to consider?
When analyzing financial statement data, what is an important factor to consider?
- The company's marketing strategy
- The company's location
- The company's employee turnover
- The underlying data quality (correct)
What is one limitation of financial ratios?
What is one limitation of financial ratios?
- They do not account for inflation (correct)
- They cannot be compared to industry averages
- They are not part of the accounting cycle
- They are only relevant for large companies
When comparing financial ratios, what can be used as a benchmark?
When comparing financial ratios, what can be used as a benchmark?
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Why is it sometimes difficult to categorize companies into a particular industry?
Why is it sometimes difficult to categorize companies into a particular industry?
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