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Many financial analysts substitute one amount for another in making ratio analysis comparisons in order to better achieve intercompany or company-to- industry data comparability. Which
Many financial analysts substitute one amount for another in making ratio analysis comparisons in order to better achieve intercompany or company-to- industry data comparability. Which of the substitutions described here would not achieve better data comparability (for the ratio indicated) under any situation? a. Cost of goods sold for salesin the numerator of the inventory turnover ratio. b. Cost of plant and equipment for net book valuein the numerator of the plant and equipment turnover ratio. c. Expected future earnings per share for current earnings per sharein the denominator of the price/earnings ratio. d. Average net assets for average total assetsin the denominator of the return on investment ratio
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