In evaluating a company's financial statements, the least useful information would be derived from a comparison of the current period data with
A)economic and industry data.
B)another company in the same industry for the same period.
C)the same company's data from five years ago.
D)the same company's data from the prior year.

Question

Quizplus · Accepted Answer

Comparing current period data with the same company's data from five years ago is generally considered the least useful. This is because financial performance can be significantly influenced by numerous factors over such a long period, making it difficult to draw relevant conclusions for the current period's performance. Shorter term comparisons, such as with the prior year, another company in the same industry, or against economic and industry data, are typically more relevant for assessing current financial health and trends.

In Evaluating a Company's Financial Statements, the Least Useful Information