Potential Pitfalls of Financial Statement Analysis Which one of the following statements is true with respect to financial statement analysis?

a. All aspects of a business can be summarized neatly into the three primary financial statements.

b. Comparing the financial statements of different companies is relatively easy because all companies are required to use the same financial statement formats and classifications.

c. Every company examined using financial statement analysis will be found to have at least one prominent flaw.

d. Analysts should use only historical ratio analysis, rather than information about current events, in deciding how to rate a company’s future prospects.

e. Financial statement analysis usually does not give answers but instead points in directions where further investigation is needed.