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Ratio analysis is an important tool used by investors, creditors, and management when assessing the health...

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Finance

Ratio analysis is an important tool used by investors, creditors,and management when assessing the health of a company. However,ratio analysis has some problems and issues. What do you think arethe problems and issues you must be aware of when conducting ratioanalysis? What are the key ratios a creditor would investigate, andwhy?   

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Ratio analysis is an important tools used by various stakeholder to assess the financial health of the company It indicates one number in relation with the other But there are also some problems and issues involved with the ratio analysis Ratio analysis involves the number and those numbers are derived from the previous financial statement So predicting the outcome of future event based on the historic data is very hard It takes the data from the financial statement So we need to make sure that the data    See Answer
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Transcribed Image Text

Ratio analysis is an important tool used by investors, creditors,and management when assessing the health of a company. However,ratio analysis has some problems and issues. What do you think arethe problems and issues you must be aware of when conducting ratioanalysis? What are the key ratios a creditor would investigate, andwhy?   

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