Answer the following statements true (T) or false (F)
1. Time-series analysis evaluates the performance of various firms at the same point in time using financial ratios.
2. Ratios merely direct an analyst to potential areas of concern and it does not provide conclusive evidence as to the existence of a problem.
3. A single key ratio of a firm provides all the information required to judge the overall performance of the firm.
4. Due to inflationary effects, inventory costs and depreciation write-offs can differ from their replacement values, thereby distorting profits.
5. In ratio analysis, the financial statements being used for comparison should be dated at the same point in time during the year. If not, the effect of seasonality may produce erroneous conclusions and decisions.
1. FALSE
2. TRUE
3. FALSE
4. TRUE
5. TRUE
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