A Firm Had Been Sued and Found Guilty of Religious

question 18

Multiple Choice

A firm had been sued and found guilty of religious discrimination against people who practiced Judaism, and managers were instructed to be very careful to avoid another similar suit.  To that end, Jewish employees, but not others, were given raises. Of the following, what is the most correct assessment of this policy?

• A)the policy is sound, both legally and ethically
• B)the policy is sound legally, but not ethically
• C)the policy is neither legally nor ethically sound
• D)the policy is sound ethically, but not legally

---

Definitions:

Vertical Analysis

A method in financial analysis where each entry in a set of financial statements is listed as a percentage of another item, typically used for income statement and balance sheet analysis to show relative proportions.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, resulting in net profit or loss.

Common-sized Balance Sheet

A balance sheet in which each line item is expressed as a percentage of total assets, facilitating comparison with other companies regardless of size.

Vertical Analysis

A method of financial statement analysis in which each line item is listed as a percentage of a base figure within the statement, allowing for easy comparison and analysis of different-sized companies.