The Third Step in Financial Statement Analysis Is to Assess

question 69

Multiple Choice

The third step in financial statement analysis is to assess the quality of the firm's financial statements.Which of the following is a question an analyst should ask when performing this step?

• A) Are industry sales growing rapidly or slowly?
• B) Do earnings include revenues that appear mismatched with the business model employed by the firm?
• C) Does the industry include a large number of firms selling similar products?
• D) What is the company's degree of geographical diversification?

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