ADVANTAGES AND LIMITATIONSAdvantagesRatio analysis is an important and ancient technique of financial analysis. Here are some of the advantages of ratio analysis:1. Simplifies financial statementsIt simplifies the understanding of financial statements. Ratios tell the whole story of changes in the company's financial condition.2. Facilitates inter-company comparison. It provides data for inter-company comparison. Ratios highlight the factors associated with the success and failure of a business. They also reveal strong companies and weak companies, overvalued and undervalued companies.3. Helps with planningIt helps with planning and forecasting. Ratios can assist management in its basic forecasting functions. Planning, coordination, control and communications.4. Makes inter-company comparison possible. Ratio analysis also allows you to compare the performance of different divisions of the company. Ratios are useful in deciding whether or not they have been effective in the past and how they are likely to perform in the future.5. Help with investment decisionsThis helps with investment...