Q.State any four points of significance (advantages) of Ratio Analysis.

The whole point of ratios is to make a heap of financial figures usable for a decision - and that usefulness shows up in several distinct advantages.

Four advantages are: it simplifies complex financial statements into a few meaningful indicators; it facilitates comparison across years and between firms; it helps judge liquidity, activity, and profitability; and it aids forecasting, planning, and control.

The significance (advantages) of Ratio Analysis includes the following (any four):

1. Simplifies financial statements - a mass of figures is reduced to a few meaningful indicators that a non-expert can grasp quickly.
2. Facilitates comparison - ratios allow intra-firm comparison (the same firm across years, revealing trends) and inter-firm comparison (against competitors or an industry standard).
3. Helps judge efficiency - liquidity, activity, and profitability ratios each reveal how well the firm is doing on a specific dimension.
4. Aids forecasting and planning - trends in ratios help management estimate future performance and set targets.
5. Assists control and decision-making - a ratio that departs from its standard flags an area needing management attention.
6. Useful to many stakeholders - creditors, investors, and lenders each rely on ratios for their own decisions.

Students sometimes list only 'comparison' and stop there - significance covers several distinct advantages (simplification, comparison, judging efficiency, forecasting, control); name four genuinely different points, not four rewordings of the same one.