Pitfalls when forecasting earnings include failure to consider:

I. capital adequacy.
II. capacity constraints.
III. anticipated return on equity.
IV. new management.

A)I and III
B)II and IV
C)I, III, and IV
D)I, II, and III

Question

Pitfalls when forecasting earnings include failure to consider:

I. capital adequacy.
II. capacity constraints.
III. anticipated return on equity.
IV. new management.

A)I and III
B)II and IV
C)I, III, and IV
D)I, II, and III

Quizplus · Accepted Answer

Failure to consider capital adequacy, capacity constraints, and anticipated return on equity can all affect earnings forecasts. While new management can also be a factor, it is not necessarily always a pitfall and therefore not included in the best choice of answer.

Pitfalls When Forecasting Earnings Include Failure to Consider