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प्रश्न
How does the quality of ratio analysis depend upon the accuracy of its financial statements?
लघु उत्तर
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उत्तर
Ratios are calculated using data from profit and loss statements and balance sheets. As a result, their accuracy depends on the accounting data used. For example, if the closing inventory is overvalued, not only will profitability be overstated but the financial situation will also look to be better.
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