Which of the following is an important step in ratio analysis ........

Accountancy (Phase -I & II) Ratio analysis

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Which of the following is an important step in ratio analysis?

Calculation of ratios

Comparison

Interpretation

All of the above

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Explanation:

Steps involed in ratio analysis are
1. An analyst should decide the objectives of ratio analysis.
2. Select the appropriate ratios on the basis of objectives of ratio analysis.
3. Calculation of the selected such ratios.
4. Comparison of the calculated ratios with the ratios of the same business concern in the past.
5. Comparison of the calculated ratios with the same type of ratios of other similar business concern.