Question 5.KC.5: Which is not generally a problem with using industry average...

Financial Statement Analysis

Which is not generally a problem with using industry averages?
a. A company may be a conglomerate.
b. The company may use different accounting procedures than the industry.
c. Industry data is not available at year-end.
d. All of the above.

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a. Incorrect. If a company is a conglomerate, there may be a problem when using industry averages.
b. Incorrect. If the company uses different accounting procedures than the industry, there may be a problem when using industry averages.
c. Incorrect. If industry data is not available at year-end, there may be a problem when using industry averages.
d. Correct. Each of these things in answers a., b., and c. is a problem to consider when using industry averages making the best response, d.

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