Limitations Of Ratio Analysis Flashcards
1
Q
What do results depend on
A
The quality of the financial statements
2
Q
What may inflation do
A
It may distort results
3
Q
What must an analyser do
A
Must also look at financial statements
4
Q
What is difficult
A
Finding appropriate comparisons
5
Q
What might not be good representation of the year as whole
A
SoFP year end values
6
Q
What might different companies have
A
Different accounting policies
7
Q
What might results not tell us
A
They will tell us what happened but not why
8
Q
What do ratios ignore
A
The non financial aspects of performance
9
Q
What can the past not predict
A
The future
