An Individual Analyzing a Firm's Financial Statements Should Do All

question 42

Multiple Choice

An individual analyzing a firm's financial statements should do all but which one of the following?

• A) Use unaudited financial statements
• B) Perform a trend analysis
• C) Perform a benchmark analysis
• D) Compare the firm's performance to that of its direct competitors

---

Definitions:

Salaries

Compensation paid to employees for work performed, often expressed as an annual sum or hourly wage.

Net Income

The total profits of a company after all expenses and taxes have been deducted from total revenues.

Owner's Drawings

The act of an owner drawing funds from a business in a sole proprietorship or partnership for personal needs.

Capital Account

A capital account is a financial statement that shows the changes in a company’s assets, liabilities, and equity, or an individual part of a nation's balance of payments reflecting net change in ownership of national assets.