登录之后可查看解析

Answer A:
The Third State Bank would be interested in comparative financial statements so that it could analyze trends in data and operating results. Trends are important because they may point to basic changes in the nature of the business.
Ratio analysis would give some indication of the company's short-term solvency and help Third State Bank assess the level of risk involved. The ratios would also be useful in analyzing how RCS is performing compared to industry averages, and thus serve as a benchmark for comparison to other companies. Ratios reduce absolute dollar amounts to more meaningful data in order for the bank to compare ratios to prior periods, other companies, and the industry. Ratios can be used to show how well the company is being managed and to highlight areas for further investigation. If the ratios do not appear favorable compared to the company's own past and to other companies in its industry, the bank may consider adjusting the dollar level and/or the interest rate of the note or may even decide not to renew the note.


Answer C:
The difficulties and limitations of ratio analysis include the following.
 Although ratios are useful as a starting point in financial analysis, they are not an end in themselves. Ratios can be used as indicators of what to pursue in a more detailed analysis.
 Difficulties can arise in making industry average comparisons.
Topic 1: Different companies could use different accounting methods (e.g., FIFO versus LIFO inventory valuation).
Topic 2: Even though two companies are in the same industry, they may not be comparable because they are focused on a different aspect of the business. For example, two companies may be in the oil industry, but one may be primarily a marketer of oil and the other may be a refinery.
Topic 3: Companies may be conglomerates that operate in many different industries.
 The ratios are only as good as the data upon which they are based. If accounting policies are questionable, the resulting ratios would also be questionable.