Benefits and limitations of Financial Decision making
- Created by: chloebryson
- Created on: 10-05-22 09:12
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- Financial Decision Making
- Limitations
- Ratio analysis info is historic-not current
- Does not take into account external factors
- Eg. Recession
- Fails to measure human elements of a firm
- Only used for comparison with other firms of the same size and type
- Difficult to compare w other businesses as they may not want to share info
- Benefits
- Help compare firms performace w similar competitors
- Ratios help compare current performance with previous
- Help monitor and identify issues that can be resolved
- Help w future decision making
- Highlight areas for future investigation
- Limitations
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