The basic tools of financial analysis are the same under both GAAP and IFRS except that
A) None of these answer choices are correct.
B) the current ratio cannot be computed because current liabilities are often reported before current assets in GAAP statements of position.
C) analysis is different because vertical analysis cannot be done under GAAP.
D) horizontal analysis cannot be done because the format of the statements is sometimes different.

Question

Quizplus · Accepted Answer

The basic tools of financial analysis, such as ratio analysis, trend analysis, and vertical analysis, are applicable under both GAAP and IFRS. The format of financial statements may differ under the two systems, but the underlying financial information remains the same, and financial analysis can be performed using the same tools regardless of the accounting standards being used. The other answer choices provided in the question are incorrect.

The Basic Tools of Financial Analysis Are the Same Under