Analysts agree that extraordinary gains/losses should be excluded from ratio analysis because they are one time events, and do not measure annual operating performance.

Question

Quizplus · Accepted Answer

Extraordinary gains or losses are considered non-recurring events and can distort the true operating performance of a company if included in ratio analysis. Therefore, they should be excluded to ensure a more accurate evaluation of the company's performance.

Analysts Agree That Extraordinary Gains/losses Should Be Excluded from Ratio