abhishreshthaa
Abhijeet S
During the later half of the 19th century. The bankers have used accounting ratios for analyzing a prospective debtor’s credit standing. But, their analysis was very much restricted to the study of current ratios alone.
It was in 1919; Alexander Wall came out with his strong criticism of such a restricted and narrow analysis and pointed out the possible dangers of such an analysis.
He maintained that, in order to get a clear picture of the financial health of the business, one has to take into account various other relationships besides the current ratio. Since then, ratio analysis has come a long way in being an efficient tool of financial statement analysis.
It was in 1919; Alexander Wall came out with his strong criticism of such a restricted and narrow analysis and pointed out the possible dangers of such an analysis.
He maintained that, in order to get a clear picture of the financial health of the business, one has to take into account various other relationships besides the current ratio. Since then, ratio analysis has come a long way in being an efficient tool of financial statement analysis.