The ratio analysis is helpful to management in taking several decisions, but as a mechanical substitute for judgment and thinking, it is worse than useless.

True

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False

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Partially True

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None of these

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Solution

The correct option is A
True

Ratio analysis is a helpful tool but it is just a tool. We need thinking and judgement to interpret these results in the context of real world.

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Q. Which of the following statements are true about Ratio analysis?
a. Ratio analysis is useful in financial analysis.
b. Ratio analysis is helpful in communication and coordination.
c. Ratio analysis is not helpful in identifying weak spots of the business.
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Q. Objective Type Questions :
State whether following statements are true or false :

Ratio Analysis is useful for inter-firm comparison.

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The ratio analysis is helpful to management in taking several decisions, but as a mechanical substitute for judgment and thinking, it is worse than useless.

The correct option is A True Ratio analysis is a helpful tool but it is just a tool. We need thinking and judgement to interpret these results in the context of real world.

The correct option is A
True

Ratio analysis is a helpful tool but it is just a tool. We need thinking and judgement to interpret these results in the context of real world.