FINANCIAL ANALYSIS

4When screening for potential equity investments based on return on equity, to control risk, an analyst would most likely to include a criterion that requires:

A. Positive net income

B. Negative net income

C. Negative shareholders' equity

5 One concern when screening for stocks with low price to earnings ratios is that companies with low P/Es may be financially weak. What criterion might an analyst include to avoid inadvertently selecting weak companies?

A. Net income less than zero

B. Debt to total assets ratio below a certain cutoff point

C. Current year sales growth lower than prior year sales growth

In a comprehensive financial analysis, financial statement should be :

A. Used as reported without adjustment

B. Adjusted for differences in accounting standard, such as international reporting standards and US and US

Generally accepted accounting principles C. Adjusted for differences in accounting standards, such as international financial reporting standards and

 

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