Final answer:
The statement is false; financial ratios are not subject to a universal set of standards and vary by industry and other factors. While financial ratios are useful, the F ratio is a statistical tool used in the context of ANOVA for hypothesis testing.
Step-by-step explanation:
False. While financial ratios are indeed powerful tools for analyzing a company's financial health and performance, the assertion that there are set standards that must be met for each ratio is not entirely accurate. Ratios can provide benchmarks for comparison, but the standards can vary widely depending on the industry, company size, and economic conditions. The use of financial ratios involves the analysis against historical company performance, industry averages, or competitors. However, no singular 'set standard' exists for each financial ratio.
It is important to acknowledge that the F ratio, employed in statistical analysis such as the analysis of variance (ANOVA), serves a different purpose. Here, all populations of interest are normally distributed, populations are assumed to have equal standard deviations, and samples are randomly and independently selected from each population. The F ratio is calculated to test hypotheses concerning whether any differences between group means are statistically significant.