Which factor is NOT a limitation of ratio analysis?

Ratio analysis is a widely used tool for evaluating the financial performance and position of a company. However, it does have its limitations that can affect the reliability of the conclusions drawn from the analysis. Among the provided options, visible macroeconomic factors stand out as a consideration that is not a direct limitation of ratio analysis.

Visible macroeconomic factors refer to broader economic conditions that can influence a company's performance, such as national economic growth, inflation rates, or industry trends. While these factors can impact a company's financial ratios, they do not inherently limit the analysis itself. Instead, they provide a contextual backdrop that needs to be considered alongside the ratios but do not distort or misrepresent the reliability of the ratios derived from the company’s financial statements.

In contrast, other options present specific limitations of ratio analysis. Window dressing involves practices that can make financial statements more appealing than they truly are, thereby distorting the ratios. Different accounting policies can lead to variations in how financial statements are presented, which affects the comparability of ratios across different entities. Skewed ratios due to liquidity issues can arise when a company has cash flow problems that impact its financial ratios negatively, potentially leading to misinterpretation.

Understanding these nuances helps clarify why visible macroeconomic factors are not considered a limitation