When comparing two companies with regard to profitability,it is not important to distinguish differences arising from accounting practices from differences caused by real economic conditions.

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It is important to distinguish between differences arising from accounting practices, such as the method of depreciation or inventory valuation, and differences caused by real economic conditions, such as sales and expenses. Accounting practices can have a significant impact on reported profitability, and failure to account for these differences can lead to inaccurate comparisons between companies.

When Comparing Two Companies with Regard to Profitability,it Is Not