I would like to aski, what limitations I must consider of doing a ratio analysis in the construction sector.

Thakn you,

Poularaki

In construction sectors it is very difficult to differentiate between current assets and non current assets, due to difficulty in calculation of an exact operating cycle period. Hence some ratios like current, quick test ratio are very difficult to find out.

The limitations here are that this sector does not fully abide by the PERIODIC CONVENTION.
There is however a very good substitute ,
One can adopt what is termed the PROJECT
CONVENTION.
These measurements can be arrived at
For different projects within one organisation ,
And also comparisons can be made
With other businesses of a similar nature
And also with the industry as a whole.