Which of These Are Limitations of Financial Analysis

question 27

Multiple Choice

Which of these are limitations of financial analysis?
I. The past is an imperfect guide to the future
II. Historical cost financial reports are not adjusted for inflation
III. Non-quantitative factors are not considered
IV. Ratio results often contain errors in calculations
V Comparisons may not be valid

• A) I, II, III, V
• B) I, II, IV, V
• C) II, III, IV, V
• D) I, III, IV, V

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Definitions:

Council Of Economic Advisers

A group of economists who advise the President of the United States on economic policy.

Economic Report

A document or presentation that provides analysis and information on the economic performance of an economy, sector, or market.

Positive Economics

A branch of economics that focuses on describing and explaining economic phenomena as they are.

Normative Economics

A branch of economics that expresses value judgments about economic fairness or what the economy ought to be like.