The use of the unaudited financial statements for ratio analysis is preferable because it reflects the firms true financial condition.

FINANCIAL MANAGEMENT

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

The use of the unaudited financial statements for ratio analysis is preferable because it reflects the firm’s true financial condition.

A	True
B	False
C	Either A or B
D	None of the above

Explanation:

Detailed explanation-1: -Ratio analysis compares line-item data from a company’s financial statements to reveal insights regarding profitability, liquidity, operational efficiency, and solvency. Ratio analysis can mark how a company is performing over time, while comparing a company to another within the same industry or sector.

Detailed explanation-2: -1. Ensuring uniformity: There will be a uniform comparison amongst the ratio that is calculated at the same point in time. 2. True value: If the time of determining the ratio varies, there are chances that the results will be wrong or inaccurate.

Detailed explanation-3: -Answer and Explanation: The answer is D. Ratios help analyze the performance of a company and compare its performance with other firms within that industry.

Detailed explanation-4: -The answer is True. Financial Statements consists of Statement of Financial Positions ("Balance Sheet"), Statements of Comprehensive Income ("Income Statement"), Statement of Cash Flows, Statement of Stockholders Equity and Notes to Financial Statements. These reports are all part of Financial Reports.

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BUISENESS MANAGEMENT

FINANCIAL MANAGEMENT