Discuss at least three potential issues in utilizing ratio analysis that you would share with your colleague.

Ratio analysis is a common technique in financial analysis.  One of your colleagues states that a thorough ratio analysis is all that is needed in considering the financial health of a company. Although you agree that ratio analysis is a helpful guide, there may be some potential pitfalls in ratio analysis.

 

ANSWER THE TWO FOLLOWING QUESTIONS BELOW THOROUGHLY

1. Discuss at least three potential issues in utilizing ratio analysis that you would share with your colleague.

 

2. In addition, calculate a liquidity, profitability, and efficiency ratio from your Week Six company to demonstrate your observations. 

 

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