discussion 2 fin 534

I’m studying for my Writing class and need an explanation.

Analysis of Financial Statements

Please respond to the following:

  • Determine why it is sometimes misleading to compare a company’s financial ratios with those of other firms that operate within the same industry. Support your response with one (1) example from your research.

i will need a response to a student also this is the student response

Danielle Debardelaben

RE: Week 2 Discussion


  • Sometimes it can be confusing to compare a company’s financial ratios with other firms that operate within the same industry because each may use different accounting methods.
  • Accounting information used in calculation of ratios is affected by the estimates, assumptions and diverse accounting methods used by companies.
  • For example, a small company cares more about its ratios emphasis on current assets and liabilities instead of market value ratios.
  • For example, a company that uses the FIFO method to value its inventory will have a higher inventory value compared to the company that uses LIFO.
  • Ratios calculated from this type of data vary and provide false information when used to compare the two companies even if they operate in the same industry.
Read more
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat

Good News ! We now help with PROCTORED EXAM. Chat with a support agent for more information


Thank you for choosing MyCoursebay. Your presence is a motivation to us. All papers are written from scratch. Plagiarism is not tolerated. Order now for a 15% discount

Order Now