Accounting for IGCSE & O level - Advanced Principles (Section 7 - No. 47)
What is a significant limitation when using ratios?
They are too simple to provide any useful information.
They only show how a business is doing in the present time.
They do not reveal non-financial aspects
They can be easily manipulated.
Forklaring
Manipulated ratios can distort the true financial performance of a business.