What are the advantages and disadvantages of financial ratio analysis?

Excellent: Financial ratio analysis can eliminate the influence of scale and compare the benefits and risks of different enterprises, thus helping investors and creditors make rational decisions.

Shortcomings: In financial analysis, ratio analysis is the most widely used, but it also has limitations, which are highlighted in the following aspects: ratio analysis belongs to static analysis and is not absolutely reasonable and reliable for forecasting the future. The data used in ratio analysis is book value, which is difficult to reflect the influence of price level.