Which of the following might an analyst not want to eliminate from past earnings when using past earnings to forecast future earnings?
A) nonrecurring gains from the sale of assets.
B) unusual asset impairment charges.
C) nonrecurring restructuring charges.
D) revenue from the sale of inventory.

Question

Quizplus · Accepted Answer

Revenue from the sale of inventory is a recurring component of earnings and should not be eliminated when using past earnings to forecast future earnings. A, B, and C are all nonrecurring items that may not be indicative of future earnings potential and should be eliminated or adjusted for.

Which of the Following Might an Analyst Not Want to Eliminate