Explanation

a. 

Accounting ratios are mathematical calculations used to evaluate and analyze the financial performance and position of a company. These ratios are derived from the financial statements, such as the balance sheet, income statements, and cash flow statement, and provide insights into various aspects of a company's operations, profitability, liquidity, solvency, and efficiency.

Examples of liquidity ratio are: Current ratio, Quick ratio, Cash ratio etc.

b. 

- Accounting ratios are used to assess the overall performance of a company by analyzing key indicators such as return on investment, return on assets, and return on equity.

- Accounting ratios such as current ratio, quick ratio, and debt-to-equity help assess the financial health and stability of a business.

- Accounting ratios such as gross profit margin, net profit margin, and return on sales are used to measure a company's profitability

- Accounting ratios like current ratio and quicj ratio help evaluate a company's liquidity position and its ability to meet short-term obligations.

- Accounting ratios play a crucial role in investment analysis by allowing investors use ratios like earnings per share, price to earnings ratio and dividend yield to assess the investment potential of a company's stock.

c. 

- Accounting ratios are based on historical financial statements, which may not accurately reflect the current financial position or future prospects of a company.

- Accounting ratios provide numerical indicators but often lack the context behind the numbers.

- Accounting ratios heavily rely on the accuracy and realibility of financial statements. Howevefr, financial statements can be subjective and influenced by management judgments, accounting policies, and potential manipulation

- Accounting ratios primarily focus on financial data, such as balance sheets and income statements, while excluding non-financial aspects like customer satisfaction, employee morale, or brand value.

- Accounting ratios often overlook non-financial factors such as environmental sustainability, social responsibility, or corporate governance practices.

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