A Limitation of Ratio Analysis Is That

Multiple Choice

A limitation of ratio analysis is that:

A) it is useful only for large, multidivisional firms.
B) inflation, which distorts the firm's balance sheet, is considered when calculating ratios.
C) seasonal factors that distort the firm's balance sheet are taken into account when calculating ratios.
D) window-dressing techniques will change the ratios of a firm.
E) statistical procedures are considered to analyze the net effects of a set of ratios.