Question: Why is it necessary to evaluate financial ratios on a comparative basis rather than in absolute terms? What bases of comparison can be used?

Why is it necessary to evaluate financial ratios on a comparative basis rather than in absolute terms? What bases of comparison can be used?

Step by Step Solution

★★★★★

3.52 Rating (162 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Ratios have no meaning in absolute terms One cant say that a particular rati... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

408-B-M-A-F-S-A (2903).docx

120 KBs Word File

Students Have Also Explored These Related Managerial Accounting Questions!

Q:

Why is it necessary to convert accrual-based net income to cash-basis income when preparing a statement of cash flows?

Q:

Why is it necessary to distinguish between business assets and liabilities and non-business assets and liabilities of a single proprietor?

Q:

Why is it necessary to physically count inventory when the perpetual inventory method is being used?

Q:

QUESTION: PLEASE DO 7 AND 8 7. Long-term liabilities? 8. What benchmarks (such as industry averages and S&P 500 averages etc.) did you use to evaluate the ratios for your company? How were they...

Q:

Question: What benchmarks (such as industry averages and S&P 500 averages etc.) did you use to evaluate the ratios for your company? How were they helpful? Long-term liabilities? technical resources,...

Q:

Question: What benchmarks (such as industry averages and S&P 500 averages etc.) did you use to evaluate the ratios for your company? How were they helpful? Long-term liabilities? technical resources,...

Q:

(1) Financial Ratios Referencing this week?s readings and lecture, what are the limitations of financial ratios? Classify your answer into at least the following categories: liquidity ratios,...

Q:

technical resources, enables us to rapidly bring highly-valued customized solutions to our customers. History Modine was incorporated under the laws of the State of Wisconsin on June 23, 1916 by its...

Q:

QUESTION: PLEASE ANSWER 1 AND 2 CHAPTER 10 1. What kinds of long term liabilities does the company report? Has there been any new long-term debt issued this year? 2. What are the stated interest...

Q:

QUESTION: PLEASE DO 1 2 AND 3 CHAPTER 12 1. What information is contained in the Statement of Cash Flows (SCF) that can help investors, creditors, and others? 2. Which activities are included in the...

Q:

Let x be the explanatory variable and y be the response variable. Construct a scatterplot of the ordered pairs listed in Table 8. Table 8 Some Ordered Pairs x y 2.5 7.9 11 10 14..9 16..5

Q:

1. Create nine (9) variables to represent the following data. There are three (3) products, each with three (3) related pieces of information: Product ID Price Taxed Product-1 111 111.49 Y Product-2...

Q:

Draw the density curve corresponding to each of the following normal random variables, and then shade the area corresponding to the desired probability. You do not need to compute the probability. a....

Q:

Explain why the fair value of an enterprises assets is used in the preparation of consolidated financial statements.

Q:

Under what circumstances do you think how MWW amortizes its capital assets would matter to some of its stakeholders?

Q:

How does MWW amortize its capital assets? Why does MWW amortize its capital assets (aside from the fact it is required by GAAP)?

Q:

At the end of fiscal 1999 MWW owned a piece of land that had a cost of $45,000 and a NBV of $45,000. Explain why the cost.of the land and the NBV of the land were the same.

Q:

In Year 1, Aliyah's Boutique (a retail clothing company) sold 10,660 units of its product at an average price of $27 per unit. The company reported estimated returns and allowances in Year 1 of 2.0...

Q:

Gough Corporation has two divisions: Domestic and Foreign. Data from the most recent month appear below: Total Company Domestic Foreign Sales $771,700 $393,700 $378,000 Variable expenses 268,525...

Q:

roblem 6: ( 6 Points)\ cording to this system, answer the following questions.\ if _(C)^(P)Prg=[[e1],[e2],[e3]] , then el= . e3= \ If _(C)^(B)R=[[d1,d4,d7],[d2,d5,d8],[d3,d6,d9]] , then: d1= d4= d2=...