A Financial Analyst Is Comparing Two Companies

question 93

Multiple Choice

A financial analyst is comparing two companies.Which of the following would cause major problems in the evaluation process?

• A)One company has a fiscal year that ends on October 31,while the other company has a fiscal year that ends on August 31.
• B)One company reported nonoperating activities,while the other company did not.
• C)The companies operate in different industries.
• D)Inflation has been low for the past several years.

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Definitions:

Primary Research

Collection of original data or firsthand information through methods like surveys, interviews, or experiments.

Experiments

Controlled procedures carried out to discover, test, or demonstrate a hypothesis or the effect of one variable on another.

Qualitative Research

A research method focused on understanding phenomena through observing and interpreting non-numerical data, such as interviews, observations, and texts.

Data

Quantitative or qualitative information collected for reference, analysis, or to serve as the basis for decision-making.