How many of these are limitations of financial analysis?
I The past is an imperfect guide to the future
II The effect of inflation is not considered
III Undisclosed changes in accounting policies
IV Inconsistent classification
A) One
B) Two
C) Three
D) Four

Question

Quizplus · Accepted Answer

All four options (I, II, III, IV) are limitations of financial analysis. Financial analysis often relies on historical data, which may not accurately predict future performance (I). It typically does not account for inflation (II), may not reflect changes in accounting policies if they are not disclosed (III), and can be affected by inconsistent classification of items in financial statements (IV).

How Many of These Are Limitations of Financial Analysis