Which of These Statements Is False

question 17

Multiple Choice

Which of these statements is false?

• A)A ratio can be computed from any pair of numbers.
• B)Given the large quantity of variables included in financial statements,a very long list of meaningful ratios can be derived.
• C)Comparing ratios computed from income statement and balance sheet numbers can create difficulties due to the timing of the financial statements.
• D)Financial ratios are usually expressed in percent or times.
• E)In vertical analysis,a figure from this year's statement is compared with a base selected from the prior statement.

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Definitions:

Book Value

The net value of a company's assets, less its liabilities and intangible assets, as recorded on the balance sheet.

Market Value

The current price at which an asset or service can be bought or sold in the marketplace, which fluctuates based on supply and demand dynamics.

Goodwill

An intangible asset that arises when a business is purchased for more than the fair value of its net assets, reflecting reputation, brand, etc.

Incremental Value

The additional value created by a specific action or decision, compared to what would have occurred without it.