Identify a true statement about ratio analysis.
A. A ratio analysis only provides insight into a firm's health when compared over time or to the ratios of other firms.
B. Entrepreneurs must evaluate their firms on all ratio analysis figures to gain a proper understanding of their firms' operational health.
C. Because of the large amounts of financial data it requires, a ratio analysis cannot be performed by relatively new entrepreneurial firms.
D. While they are valuable tools, ratio analysis is ultimately less useful than nonfinancial data analysis methods.
Answer: A
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