Tag Archives | Performance Evaluation

Top 6 Advantages of Ratio Analysis

The following points highlight the top six advantages of ratio analysis. The advantages are: 1. Useful in Financial Position Analysis 2. Useful in Simplifying Accounting Figures 3. Useful in Assessing the Operational Efficiency 4. Useful in Forecasting Purposes 5. Useful in Locating the Weak Spots of the Business 6. Useful in Comparison of Performance. Advantages of Ratio Analysis: Useful in [...]

By |2016-06-18T06:58:42+00:00June 18, 2016|Performance Evaluation|Comments Off on Top 6 Advantages of Ratio Analysis

9 Major Limitations of Ratio Analysis

The following points highlight the nine major limitations of ratio analysis. The limitations are: 1. False Results if Based on Incorrect Accounting Data 2. No Idea of Probable Happenings in Future 3. Variation in Accounting Methods 4. Price Level Changes 5. Only One Method of Analysis 6. No Common Standards 7. Different Meanings Assigned to the Same Term and Others. [...]

By |2016-06-18T06:58:42+00:00June 18, 2016|Ratio Analysis|Comments Off on 9 Major Limitations of Ratio Analysis
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