How does inflation distort ratio analysis comparisons for one company over time (trend analysis) and for different

Question:

How does inflation distort ratio analysis comparisons for one company over time (trend analysis) and for different companies that are being compared? Are only items or both and income statement items affected?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...