Question: How would you respond to this post? Given our situation concerning Coronavirus and the hiatus of many different sporting events, I feel a burning desire

How would you respond to this post?

Given our situation concerning Coronavirus and the hiatus of many different sporting events, I feel a burning desire to utilize a sports metaphor. One major drawback of relying wholly on financial analysis ratios is that not all of them are created equal. For example, when a player in baseball bats at a .300 rating or higher, they are considered very effective. When drifting closer to the .350 or .400 rating, that athlete is considered absolutely fantastic! This implies that of all times the player steps into the box to hit the baseball, they are successful in both hitting the ball and getting on a base this percentage of the time. When a quarterback completes 30%, 35%, or 40% of his passes, it is very likely to get him either benched, fired, or both. A solid, consistent, and reliable completion percentage is closer to 65% or 70% and obviously, the higher the better. Financial ratios are similar. Depending on the market, the business, and the industry, a ratio might indicate wild success in one situation but a complete failure in another. On the same note, just because a player is an excellent batter doesn't mean they are also productive on defense. Ratios are useful but not the end-all, be-all. Since I'm on a metaphor kick, I remember the first and only speeding ticket I ever received. It was a trap; they had a 75mph sign and less than 20 yards later there was a 55mph sign. Unless I was very familiar with the area, it didn't give me the slightest chance to not get pulled over. Cops were just waiting for naive outsiders like myself to stroll by. Financial and accounting laws and policies change, just as any regulations. Everything must eventually grow and adapt or die, it's that simple. Utilizing only financial ratios doesn't enable the flexibility of adaptations of policy changes. Lastly, many ratios are used as a snapshot of a company's health or performance. However, due to companies understanding that fact, it can become very easy to have companies alter their financial ratios to appear better at certain times of the year. Naturally, this is referred to as window dressing, thus making the company appear better than it is to attract investors (Byrd, Hickman, & McPherson, 2013). Financial ratios, just like speed limits, BMI, or credit scores, can indicate a degree of reality but they are simply unable to paint a full picture of the financial scenario.

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