Essay Available:
Pages:
1 page/β275 words
Sources:
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Style:
Other
Subject:
Accounting, Finance, SPSS
Type:
Coursework
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 5.62
Topic:
Ratio Analysis: Benefits and Limitations
Coursework Instructions:
What are the benefits of ratio analysis? What are the limitations of ratio analysis? What can be done to minimize the limitations on ratio analysis? Explain. Cite any references used. I only need 150 words
Coursework Sample Content Preview:
Ratio Analysis: Benefits and Limitations
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Ratio Analysis: Benefits and Limitations
Data enclosed in the financial statements of an enterprise is quantitatively analyzed using ratio analysis. Financial ratio analysis is a powerful tool for analyzing financial statements since it allows users to compare the financial position and performance of companies with their rivals or competitors across time. The main strength of financial ratio analysis is in its comparability and simplicity that helps in trend analysis, comparing companies of different sizes, and in simplifying the financial statements of companies that allows users to express the financial position and profitability information in a seamless manner Jan, 2019). Financial ratio analysis also helps in quickly highlighting critical information in the simplest form. For instance, users can judge companies by only taking glance at a few numbers instead of going through the entire financial statements.
While financial statements are ...
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