116.Discuss the limitations that affect financial statement analysis. 117.Describe the differences between the liquidity ratios, solvency ratios and profitability ratios. Identify examples of each...

116.Discuss the limitations that affect financial statement analysis.

117.Describe the differences between the liquidity ratios, solvency ratios and profitability ratios. Identify examples of each type of ratio as well.

118.Indicate whether each of the following statements is true or false.


_____ a) Financial statement ratios permit comparisons over time and among different companies.
_____ b) Knowledge of financial statement analysis techniques is useful to stockholders and creditors but not to the managers of a business.
_____ c) The primary objective of accounting is to provide information that is stable over time.
_____ d) Current accounting principles indicate that financial statements should be prepared to meet information needs of those who have a reasonably informed knowledge of business.
_____ e) Financial statements are aimed at the information needs of stockholders only.