1. Which of the following is not a reason why financial analysts use ratio analysis?

Question

a. Ratios help to pinpoint a firm's strengths.

b. Ratios restate accounting data in relative terms.

c. Ratios are ideal for smoothing out the differences that may exist when comparing firms that use different accounting practices.

d. Some of a firm’s weaknesses can be identified through the usage of ratios.

Answer 1

C.  This has nothing to do with why ratios are used.