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Basic Question 1 of 2

Which of the following statements is true when analyzing a company's financial ratios?

I. As long as the accounting methods used are similar, it is possible to compare two companies even if they operate in different industries.
II. Income statements would be more reflective of economic reality if replacement cost figures were used instead.

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I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt

Martin Rockenfeldt

Learning Outcome Statements

demonstrate the use of a framework for the analysis of financial statements, given a particular problem, question, or purpose (e.g., valuing equity based on comparables, critiquing a credit rating, obtaining a comprehensive picture of financial leverage, evaluating the perspectives given in management's discussion of financial results);

CFA® 2024 Level II Curriculum, Volume 2, Module 16.