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Compare the quality of earnings ratio for the two firms. For which firm do you feel most comfortable about the reported earnings quality? ( Select
Compare the quality of earnings ratio for the two firms. For which firm do you feel most comfortable about the reported earnings quality? Select the best choice below.
A
Both Home Depot's and Lowes' quality of earnings ratios are fairly stable over time, this suggests that the firm's earnings and cash flows are in sync and that reported earnings provide a highquality indicator of the firm's future performance potential.
B
Home Depot's quality of earnings ratio is fairly stable over time, this suggests that the firm's earnings and cash flows are in sync and that reported earnings provide a highquality indicator of the firm's future performance potential.
C
Lowes quality of earnings ratio is fairly stable over time, this suggests that the firm's earnings and cash flows are in sync and that reported earnings provide a highquality indicator of the firm's future performance potential.
D
The information is not sufficient to tell which firm's quality of earnings ratios is more stable.
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