Step-by-step explanation:
True.
The statement is true. The greatest limitation of ratio analysis is indeed that it relies on historical data. Ratio analysis involves analyzing financial ratios derived from historical financial statements to evaluate a company's performance, profitability, liquidity, and other aspects. As such, it provides insights into past performance but does not necessarily predict future outcomes or account for potential changes in the business environment. External factors, market conditions, and future events can significantly impact a company's performance, making ratio analysis limited in its ability to provide a complete picture of the future.