Showing comparative financial statements helps users _______.
A)to calculate a definite future stock price
B)to analyze the company's financial condition and profitability
C)spot potential problems in the most recent years note disclosures
D)understand the difference between basic and diluted earnings per share

Question

Quizplus · Accepted Answer

Comparative financial statements allow users to analyze the financial condition and profitability of a company over time by comparing its performance in different periods. This helps them to identify trends, strengths, and weaknesses in the company's financial performance. However, comparative financial statements cannot be used to calculate a definite future stock price, spot potential problems in the most recent years' note disclosures, or understand the difference between basic and diluted earnings per share.

Showing Comparative Financial Statements Helps Users _______