What other ratios have you seen that can be misleading

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Question - The ratios only tell part of the story, and you need to look at them. Walmart has a low current ratio, but it has a negative cash flow cycle (meaning it gets money before it pays a penny). As a result, Walmart has a very favorable current position, regardless of the current or quick ratio. At times, we act like ratios tell us more than they do, they are only indicators, and we need to dig deeper.

What other ratios have you seen that can be misleading?

Ratio Analysis - Definition, Formula, Calculate Top 32 Ratios. (2021, March 31). WallStreetMojo.

Reference no: EM133139307

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