Which technique involves regrouping of data by application of arithmetical relationships, though its interpretation is a complex matter?
Answer & explanation
Correct answer: option 2
Ratio analysis is a technique
which involves regrouping of data by application of arithmetical relationships,
though its interpretation is a complex matter. It requires a fine understanding
of the way and the rules used for preparing financial statements. Once done
effectively, it provides a lot of information which helps the analyst.