Question

Objective Type Questions :
State whether following statements are true or false :

Ratio Analysis is useful for inter-firm comparison.

Answer 1

True

Explanation: Ratio analysis helps an organisation to compare the results of the business with other firms, industries and also helps in appraising the progress and growth of the organisation over the years. It facilitates comparison and helps in determining whether the business is doing better than other firms and if it is not, what are the improvement areas and the reasons for them.