Practice Limitations of Ratio Analysis - 1.6 | ICSE Class 12 Accounts – Chapter 5: Ratio Analysis | ICSE Class 12 Accounts
K12 Students

Academics

AI-Powered learning for Grades 8–12, aligned with major Indian and international curricula.

Academics
Professionals

Professional Courses

Industry-relevant training in Business, Technology, and Design to help professionals and graduates upskill for real-world careers.

Professional Courses
Games

Interactive Games

Fun, engaging games to boost memory, math fluency, typing speed, and English skills—perfect for learners of all ages.

games

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is the first limitation of ratio analysis?

💡 Hint: Think about what kinds of factors analysis usually considers.

Question 2

Easy

Explain what window dressing is.

💡 Hint: Consider how companies might portray themselves in a favorable light.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What is a critical limitation of ratio analysis?

  • Ignores qualitative factors
  • Always accurate
  • Predicts future trends

💡 Hint: Think about what types of information are often measured.

Question 2

True or False: Historical data is always reliable for predicting future performance.

  • True
  • False

💡 Hint: Consider how market conditions can shift over time.

Solve and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company shows a significant current ratio improvement over three years. However, market share is declining. Discuss the implications of this situation.

💡 Hint: Focus on both the financial data and what it means for the company's health in the market.

Question 2

If two companies in different industries had the same debt-equity ratio, can you accurately assess their financial health? Why or why not?

💡 Hint: Think about differences in financing structures across industries.

Challenge and get performance evaluation