Aging assets and inflation tend to complicate financial statement analysis by overstating return on assets.

Name: Aging assets and inflation tend to complicate financial statement analysis by overstating return on assets.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Aging assets and inflation can cause the book value of assets to be lower than their actual replacement cost, which in turn can overstate the return on assets. This can be misleading for investors and analysts who are trying to assess the actual performance of a company.

Aging Assets and Inflation Tend to Complicate Financial Statement Analysis