A limitation of ratio analysis is that:
A. it is useful only for large, multidivisional firms.
B. inflation, which distorts a firm's balance sheet, is considered when calculating ratios.
C. seasonal factors, which distort a firm's balance sheet, are taken into account when calculating ratios.
D. firms can employ window-dressing techniques to make their financial statements look better.
E. only statistical procedures are considered while analyzing the net effects of a set of ratios.
Answer: D
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