'It is a technique which involves regrouping of data by application of arithmetical relationships.' Identify the technique and state any two limitations of the technique identified.

Ratio Analysis Limitations of Ratio Analysis : (Any $\displaystyle 2$) 1.Accounting data give an unwarranted impression of precision and finality. In fact, accounting data reflect a combination of recorded facts, accounting conventions and personal judgements which affect them materially. 2. A change in the price-level makes analysis of financial statement of different accounting years meaningless because accounting records ignore changes in value of money. 3. Accounting provides information about quantitative (or monetary) aspects of business. Hence, the ratios also reflect only the monetary aspects, ignoring completely the non- monetary (qualitative) factors. 4. As there are variations in accounting practices followed by different business enterprises, a valid comparison of their financial statements is not possible 5.Forecasting of future trends based only on historical analysis is not feasible. Proper forecasting requires consideration of non-financial factors as well.