Question : Which of the following is correct for the objectives of Ratio Analysis:
A:To simplify the accounting information
B: To assess the operating efficiency of the business.
C:To help in comparative analysis
D:To analyze the profitability of the business.
Option 1: A, B and C
Option 2: B, C, and D
Option 3: A, C and D
Option 4: All of the above
Correct Answer: All of the above
Solution :
Ratio analysis has the following goals:
1: Simplify accounting data.
2: Find the liquidity or the long- and short-term solvency.
3: The ability of the business to meet its short-term financial obligations is known as short-term solvency
4: In contrast, long-term solvency refers to an organization's capacity to meet its long-term debt obligations.
5: Analyze the business's operational effectiveness.
6: Analyze the company's profitability with the assistance of comparative analysis, specifically with intra- and inter-firm comparisons.
Hence option 4 is the correct answer.
Related Questions
Trending Articles/News
