Which of the following is/are true?
A)Interpreting the income statement involves studying the relations among revenues, expenses, and net income both over time and across firms.
B)Comparisons are likely more valid for the same firm over time than across firms because of the difficulty in identifying truly similar firms.
C)In evaluating over-time performance of a given firm, the user must understand both current economic conditions and how those conditions may have changed over the period of analysis.
D)In evaluating across-firm performance, the user should control for the underlying business model by selecting peer firms that are similar, economically, to the firm being analyzed.
E)all of the above are true

Question

Quizplus · Accepted Answer

All of the statements are true. Interpreting the income statement involves understanding the relationships among revenue, expenses, and net income both over time and across firms. Comparisons over time are likely to be more valid than across firms due to difficulty in identifying similar firms. In evaluating over-time performance, it's essential to consider changes in the economic environment. In analyzing across-firm performance, it's essential to control for differences in the underlying business model by selecting similar peer firms.

Which of the Following Is/are True