The Most Acceptable Method of Evaluating the Financial Statements of a Firm

question 36

Multiple Choice

The most acceptable method of evaluating the financial statements of a firm is to compare the firm's current:

• A)financial ratios to the firm's historical ratios.
• B)financial statements to the financial statements of similar firms operating in other countries.
• C)financial ratios to the average ratios of all firms located within the same geographic area.
• D)financial statements to those of larger firms in unrelated industries.
• E)financial statements to the projections that were created based on Tobin's Q.