Business Risk and Analysis and Limitations of Ratio Analysis

Determine whether a steel company or a retail food chain would have a greater business risk. Provide support for your rationale. - Select one of the limitations of ratio analysis and indicate why you believe it is a major concern when predicting future financial performance.

Answer

Retail food chain would have greater business risk

Growing food is a precarious business, yet somehow there is a reasonably constant supply of fresh produce.

Nowadays qualityis high and prices are relatively low. Intermediary businesses in the food supply chain ensure that this happens, but it's a high-risk operation with low net margins: typically about 2per cent.

How do they survive, and what lessons can they offer to other supply-chain...