main limitations of ratio analysis

Q: disadvantages of double declinig method

A: Double declining balance method is a method which is used to record depreciation on assets. Under…

Q: Define opportunity costs and explain why they represent acommon source of error in making cost…

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Q: Explain breakeven analysis.

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Q: ost flow methods and assumptions. What

A: The different cost flow methods and assumptions are as follows: FIFO LIFO Weighted average

Q: definition of the closing

A: GAP A gap is a part separation in a very security's chart wherever its worth either rises or falls…

Q: What is one interpretation of a high P/E ratio?

A: Price to earnings ratio (P/E ratio) states the relationship of the earnings with price of that…

Q: Describe the shortcomings of the direct write-off method.

A: Direct write-off method: This method does not make allowance or estimation for uncollectible…

Q: Explain the assumptions of break-even analysis.

A: Break-even analysis - - Break-even analysis states that a number of units must be sold to cover the…

Q: List several potential difficulties with ratio analysis.

A: Ratio analysis is a correlation of details in an organization's financial reports. It is utilized to…

Q: Define unavoidable fixed costs.

A: Unavoidable fixed costs are fixed costs which cannot be avoided by discontinuing a product line or…

Q: Explain the term internal failure costs.

A: Internal failure costs: Internal failure costs include additional production-related costs that are…

Q: Differentiate between continuous compounding & continuous discounting. Which function of excel &…

A: Continuous compounding Continuous compounding is the compounding of amount for infinite time.…

Q: What is the difference between a linear and a nonlinear cost function? Give an example of each type…

A: Cost Function:Cost function represents the basic change comes in the total cost due to the change in…

Q: Define the term avoidable cost.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Describe the Cost of Elimination.

A: Costing System - A costing system is created to keep track of the costs incurred as a result of the…

Q: Explain what is meant by trade-off theory.

A: The trade-off theory, in the context of finance, refers to a fundamental concept that businesses and…

Q: List several potential problems with ratio analysis.

A: Ratio analysis is a correlation of details in an organization's financial reports. It is utilized to…

Q: Define the Sortino ratio and explain its advantage

A: Ratio analysis is referred to as the quantitative method for gaining an insight with relate to the…

Q: What two assumptions are frequently made when estimating a cost function?

A: Cost Function:Cost function represents the basic change that occurs in the total cost due to the…

Q: Is a negative Sharpe ratio good or bad?  EXPLAIN

A: What sharpe ratio measure? It measure the excess return earn by portfolio over risk free rate at…

Q: Explain the difference between a controllable and a noncontrollable cost.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: an you describe with examples of the advantages and disadvantages of ratio analysis?

A: Ratio Analysis: Ratio analysis is a financial metric used by financial managers for analyzing and…

Q: describe the main differences between Vertical and Horizontal Analysis.

A: Vertical Analysis: In financial statements, vertical analysis refers to the approach of assessing…

Q: With practical examples, differentiate between compounding and discounting

A: COMPOUNDING CONVERTS THE PRESENT VALUE INTO FUTURE VALUE DISCOUNTING CONVERTS FUTURE VALUR TO…