Limitation: Price Level Changes

AFM Ratio Analysis Free JAIIB Capsule 21 views Updated 22 Sep 2026

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AFM · Ratio Analysis

Financial analysis based solely on historical accounting ratios can give misleading results over time. Why do price level changes (inflation) create problems when using ratios for inter-firm comparison?

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Financial analysis based solely on historical accounting ratios can give misleading results over time. Why do price level changes (inflation) create problems when using ratios for inter-firm comparison?

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This capsule covers Accounting & Financial Management for Bankers, Ratio Analysis. Members get the complete explanation plus every other premium capsule, mock test and PDF.

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