Financial ratios indicate ___________.

the financial position of the company

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the insolvency condition of the company

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the sales position of the company

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the value of fixed assets of the company

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Solution

The correct option is A the financial position of the company
Financial ratio is a relative magnitude of two selected numerical values from the financial statements of the company. Financial analysts use financial ratio to compare the strengths and weaknesses of the financial position of the company. Hence, financial ratios indicate the financial position of the company.

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