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Which of the following are limitations of financial statement figures for ratio analysis? Select the ALL that apply.
Suggested Answer: A, B, C, D
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32 comments · newest first
TI
Titus
11 months ago
D is true too, summarised info can miss details.
MA
Malissa
11 months ago
Surprised that people think E is a limitation, isn't that just part of the process?
MA
Macy
11 months ago
B seems off, financial info is crucial for analysis.
GL
Glennis
12 months ago
I agree, only historic data is a big drawback!
BE
Beckie
12 months ago
A and C are definitely limitations.
LI
Lino
1 year ago
I practiced a similar question, and I recall that option D is also a limitation since financial statements summarize a lot of detailed information.
BO
Bobbie
1 year ago
I think option C could be relevant because if the data is only historic, it might not show trends effectively over time.
AL
Alona
1 year ago
I'm not entirely sure, but I feel like option B might not be a limitation since financial statements do provide some non-financial insights too.
PO
Portia
1 year ago
I remember we discussed how financial statements mainly reflect past performance, so I think option A is definitely a limitation.
MY
My
1 year ago
This is a good opportunity to showcase my understanding of ratio analysis. I'll make sure to select all the relevant limitations.
IZ
Izetta
1 year ago
I feel confident I know the key limitations, but I'll double-check each option to be sure.
SE
Sean
1 year ago
Okay, let me see. I'll start by considering each option and how it relates to the limitations of financial statement figures.
PE
Peter
1 year ago
This question seems straightforward, I think I can handle it.
ST
Stephane
1 year ago
Hmm, I'm not sure about this one. I'll need to think it through carefully.
SH
Sharee
1 year ago
Okay, I've got this. The answer is clearly B - I need to convert the RealMedia files to WMV so they'll play in Windows Media Player.
AL
Alexis
2 years ago
I see your point, Paola. It's important to consider the limitations when using financial statement figures for ratio analysis.
CE
Ceola
2 years ago
I'm just glad I don't have to analyze these financial statements. The numbers give me a headache just looking at them!
GE
Gertude
2 years ago
Haha, F is a good one! Financial statements only provide forecast data, not actual data. Really helpful for ratio analysis, right?
PA
Paola
2 years ago
I think D is also a limitation because financial statements provide only summarised information.
KA
Kathrine
2 years ago
B and E are also good options. Financial statements only provide financial information and the information can be complicated, needing to be summarized.
KA
Kanisha
2 years ago
D) Provide only summarised information
HY
Hyun
2 years ago
E) Contains complicated information that needs to be summarised
XU
Xuan
2 years ago
C) Limited information to identify trends over time
TR
Tracey
2 years ago
D) Provide only summarised information
VA
Vallie
2 years ago
A) Only provides historic data
MA
Maile
2 years ago
C) Limited information to identify trends over time
JU
Justine
2 years ago
A) Only provides historic data
FE
Felicidad
2 years ago
I agree with Agustin. Financial statement figures can be limited in that way.
AG
Agustin
2 years ago
A and C are limitations because they only provide historic data and limited information to identify trends over time.
MA
Marva
2 years ago
I think the correct answers are A, C, and D. Financial statements only provide historic data, limited information to identify trends, and summarized information.
VE
Veronika
2 years ago
That's correct, financial statements do have limitations in terms of providing historic data, limited trend identification, and summarized information.
VE
Veronika
2 years ago
I agree, financial statements only provide historic data, limited information to identify trends, and summarized information.