单选题

The use of financial ratio analysis is most likely limited in which of the following situations? When:

A、 providing a means of evaluating management’s ability
B、 comparing companies using different accounting methods
C、 providing insights into microeconomic relationships within a company that help analysts project earnings and free cash flow

【正确答案】 B

【答案解析】

Accounting methods play an important role in the interpretation of financial ratios. The lack of consistency across companies makes comparability difficult to analyze and limits the usefulness of ratio analysis.