Prospective analysis can only be conducted after historical financial statements have been adjusted.

Question

Quizplus · Accepted Answer

Prospective analysis is a type of financial analysis that uses historical financial data to make predictions about the future. In order to conduct prospective analysis, it is necessary to first adjust historical financial statements to remove any distortions or errors. This is because prospective analysis relies on the assumption that the future will be similar to the past, and any distortions or errors in the historical data could lead to inaccurate predictions.

Prospective Analysis Can Only Be Conducted After Historical Financial Statements