Question: Understanding financial ratios is important to the valuation process for which of the following reasons? A. Financial ratios describe relationships between different elements of financial

Understanding financial ratios is important to the valuation process for which of the following reasons?
  • A. Financial ratios describe relationships between different elements of financial performance and therefore provide the basis for forecasting.
  • B. Financial ratios can be used to create forecasting parameters.
  • C. Financial ratios can be used to understand the prior performance of a company and influence the value of forecasting parameters.
  • D. All of the above.

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