Question : The objectives of Ratio Analysis are
Option 1: To locate the weak spots of business which need more attention.
Option 2: To provide a deeper analysis of the liquidity, solvency, activity and profitability of the business.
Option 3: To provide information for making a cross-sectional analysis, i.e., for making a comparison with that of some selected firms in the same industry.
Option 4: All of the above
Correct Answer: All of the above
Solution : Answer = All of the above.
All of the above objectives of ratio analysis are true. It helps identify weaknesses in the business, provides comprehensive insights into liquidity, solvency, activity, and profitability, and facilitates cross-sectional analysis by comparing with similar firms in the industry for benchmarking and improvement.
Hence, the correct option is 4.
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