1. industry averages are more meaningful for small, narrowly focused firms
2.
3.reported values are often different from true values. inflation affects deprecation charges and inventory costs, reported profits are affected
4.should use monthly averages for inventory and receivables when calculating turnover ratios
5.can do things like take out a loan (cash recvd is reported as current asset). improves current and quick ratios and makes year-end balance sheet look stronger
6.Companies choices of diff accounting practices can distort comparisons (like inventory valuation and depreciation)
Reuters.com is a great web tool for ratio analysis