Please answer with 200 words or more!

Chapter 16 covers Financial Statement Analysis. As you noted in the chapter, there are 3 common analytical techniques used to analyze a company's financial statements:

1) Horizontal Analysis

2) Vertical Analysis

3) Ratio Analysis

Each technique can be used to assess the financial health and future prospects of a company.

The ratios that can be used fall into the following categories (see page 752):

1) Liquidity

2) Asset Management

3) Debt Management

4) Profitability

5) Market Performance

In the text the authors state that an analyst should not rely solely on financial statement analysis when evaluating a company? Do you agree or disagree? Why?