Which of the following statements represent a weakness or limitation of ratio analysis? Check all that apply. Ratio analysis is conducted using benchmarking techniques. A firm’s ratios can lead to conflicting conclusions—some ratios might be ""good"" and some ""bad."" Inflation can distort balance sheet data.

The fact that ratio analysis is conducted using bench-marking techniques implies that a business is compared with a best-in-class company that the business can learn best practices,hence that is on a positive note.

Secondly,the issue around conflicting ratio conclusions is a valid weakness ratio analysis. For example having higher than industry average current ratio is a good indicator of liquidity and could also mean the inventory that accounts for a larger percentage of current assets is slow moving

Inflation is another valid limitation as $1 last year is not necessarily the same this year.

anthougo anthougo · Answer 2 · 2021-09-04T03:00:23+02:00

The two statements that represent weaknesses or limitations of ratio analysis are: B. A firm's ratios can lead to conflicting conclusions and C. Inflation can distort balance sheet data.

Using ratio analysis aids the quantitative analysis of the efficiency, liquidity, and profitability of a firm or an industry. Bench-marking techniques include the use of ratios. Therefore, this is an advantage rather than a weakness.

The weaknesses of ratio analysis include:

reaching conflicting conclusions when ratios are used in isolation.
ratio analysis is calculated with balance sheet data, which do not take into account the time-value of money.

Thus, the weaknesses of ratio analysis show that the information obtained may be out of sorts by the time the ratio analysis is being performed.

Read more about the weaknesses of ratio analysis at https://brainly.com/question/15160320