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?

Question

Quizplus · Accepted Answer

To analyze a company's strategy, an analyst should ask about the company's degree of geographical diversification. This helps to determine the company's exposure to different markets, as well as opportunities for growth or potential risks. The other options given are important questions, but they do not specifically pertain to analyzing the company's strategy.

The Second Step in Financial Statement Analysis Is to Identify