The Second Step in Financial Statement Analysis Is to Identify

question 70

Multiple Choice

The second step in financial statement analysis is to identify the company strategy.Which of the following is a question an analyst should ask when performing a strategy analysis?

• 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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Definitions:

Single Task

Focusing on or dealing with only one specific task or activity at a time.

Departmentalization

The process of dividing an organization into different departments, which perform specific roles or tasks, to increase efficiency.