Question

Ratios are used in financial analysis because:

a. different companies use different accounting methods.
b. raw data is difficult to evaluate across time and companies.
c. ratios are complex analysis tools.

Answer 1

b. raw data is difficult to evaluate across time and companies.

Step-by-step explanation:

There are various ratio that company determines like liquidity ratios, solvency ratios, etc

It helps the company to analyze its financial position, performance and profitability so that the company is able to take the goods decisions that help the company to accomplish its goals and objectives

Now as per the given option, the option b is correct as the raw data is difficult to analyze and evaluate between the time period and the companies

Therefore the correct option is b.