TOPIC 8 DQ: Limitations of Financial Ratio Analysis As the
background paper, Financial Ratio Analysis, explains, a pervasive
weakness of financial ratios is that they do not permit managers
and others to assess the long-run sustainability of a business’
operations within a society.
a. Develop a ratio that a business might use to measure the
impact of its operations on:
• The communities in which it is located, or the customers that
use its products,
• The natural environment, or...