What are the limitations of financial ratios?
1. What are the limitations of financial ratios?
Classify and properly label your answer into at least the following categories: liquidity ratios, activity ratios, leverage ratios, and profitability ratios.
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2. R.E.C. Inc.’s staff of accountants finished preparing the financial statements for 2010 and will meet next week with the company’s CEO as well as the Director of Investor Relations and representatives from the marketing and art departments to design the current year’s annual report. Write a paragraph in which you present the main idea(s) you think the company should present to shareholders in the annual report. Why do you think those ideas should be included?
