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Financial Ratio Analysis: uniformity of data for comparison

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"The study level of Other is Master."

Please provide your thoughts on the following statement.

Ratio analysis should all be uniform. This will insure that every item is reviewed the same way and there is no need for interpretation. Just the facts as they are determined.

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In a solid two paragraphs, the response explains limitations and use of comparative data.

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During the ratio analysis, the financial data being compared should have been developed in the same way. We should use audited financial statements whenever its possible because they are the most commonly used ones. We should be aware of inflation distortions and all the financial data that are being ...

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Umut Oltulu, MBA
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  • BSc, Dokuz Eylul University
  • MBA, Texas A&M University-Kingsville
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