Problems with financial statement analysis include all of the following EXCEPT:
A) Many firms are conglomerates whose combined operations don't fit any neat industry classification.
B) The financial statements of firms outside US and Canada do not necessarily conform to GAAP, making it difficult to compare them to US and Canadian firms.
C) Firms may use different accounting procedures for inventory, making it difficult to compare those using standard financial ratios.
D) If two firms with seasonal operations end their fiscal years at different times, their financial statements may be difficult to compare.
E) Financial statements have little value since they cannot be used to calculate a firm's tax liability.

Question

Quizplus · Accepted Answer

Financial statements are valuable for a variety of reasons, including assessing a firm's financial health, performance, and for making investment decisions. They can indeed be used to calculate a firm's tax liability, among other things, making choice E incorrect in the context of the question.

Problems with Financial Statement Analysis Include All of the Following