Home › Bihar Board Class 12 (Commerce) › Accountancy › Analysis of Financial Statements: Tools and Accounting Ratios › Ratios reflect only monetary aspects. Which limi…
Ratios reflect only monetary aspects. Which limitation is this?
AUnrelated numbers used
BPrice-level shifts
CNon-monetary facts ignored
DNo standard yardsticks
Answer & Solution
Correct answer: C. Non-monetary facts ignored
Because accounting records only monetary facts, ratios leave out non-monetary factors like staff morale.
Related questions
DuPont analysis multiplies several ratios to give which measure?Which 1934 book by Graham and Dodd is central to fundamental analysis?What makes ratios hard to compare across countries?Ratios are of limited use unless they are what?Which ratio type measures investor response to owning a company's stock?The P/E ratio mainly reflects what?Market price Rs. 96 and EPS Rs. 8. What is the price earning ratio?Dividend per share is Rs. 3 and EPS is Rs. 12. What is the dividend payout ratio?