A firm whose primary business is in a line of regional grocery stores would be most likely to have to include which of the following facts, if true, in the firm's management discussion and analysis (MD&A)?
A) that a large number of funds were allocated to advertising to increase awareness of the firm's brand in new areas it had expanded into this year
B) that some senior members of the management team have retired in this financial year
C) that the company has lost a class action suit brought against the firm by its employees and is expected to have to pay a large amount of damages
D) that the firm has plans to expand into the organic food business in the next financial year by purchasing several small organic food retailers

Question

Quizplus · Accepted Answer

The fact that the company has lost a class action suit and is expected to pay a large amount of damages is a significant financial event that would impact the company's financial position and results of operations, making it essential to include in the MD&A. The other options are also important, but not as critical. A would be relevant to explain any changes in marketing expenses, B could be relevant to explain any changes in executive management, and D could be relevant for explaining any future expansion plans.

A Firm Whose Primary Business Is in a Line of Regional