In the last few decades the whole concept of financial analysis has changed. The Du Pont phenomena that has given birth to ratio analysis, has now attained a state of maturity and most of the practicing analysts, managers, theoreticians and researchers has realised the limitation of the concept of ratio analysis.
Ratio analysis now being considered as a useful tool but it is no longer a panacea to address all issues related with financial analysis. Interpretation of balance sheet, unearthing the hidden information and giving a chance to correct and fair disclosure of financial status is often not possible by using a simple tool of ratio analysis. Numerical and physical data has its own natural limitations to critically analyse
the qualitative dimensions.