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Question
Consider the following statements.
Statement 1 - "Ratio analysis establishes relationship between two financial statements."
Statement 2 - "Ratio analysis is a tool of financial analysis
Options
Only statement 1 is correct
Only statement 2 is correct
Both the statements are correct
None of the above
MCQ
Solution
Both the statements are correct
Explanation:
Ratio analysis is a financial analysis tool that entails the ways of calculating and evaluating financial ratios in order to determine the strengths and weaknesses of a company's performance.
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Tools of Analysis of Financial Statements
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