Question: 46
(Choose 1 answer)
There are people who believe that the analysis of financial statements has limitations. Which of the statements
below would qualify as a limitation of financial statement analysis?
A. Ratio analysis requires the analyst to evaluate a firm's performance over a period of time.
B. Proper ratio analysis requires the analyst to rely upon audited financial statements, which can be easily
manipulated.
C. Thorough ratio analysis requires the analyst to refer to benchmarking, which is very easy to misinterpret.
D. Ratio analysis requires the analyst to utilize accounting data that is based on historical value instead of current
market values.
