PACCAR Inc, designs, manufactures, and distributes trucks and related aftermarket parts that are sold worldwide under the Kenworth, Peterbilt, and DAF nameplates. In 2013, the US SEC charged PACCAR for various accounting deficiencies that "clouded their financial reporting to investors in the midst of the financial crisis." The SEC complaint cites the company's 2009 segment reporting. Exhibit 12 presents an excerpt from the notes to PACCAR's financial statements, and Exhibit 2 presents an excerpt from the management's discussion and analysis (MD&A) of PACCAR's annual report. Exhibit 1. Excerpt from Notes to PACCAR's 2009 Financial Statements S. SEGMENT AND RELATED INFORMATION PACCAR operates in two principal segments, Truck and Financial Services. The Truck segment includes the manufacture of trucks and the distribution of related aftermarket parts, both of which are sold through a network of independent dealers... The Financial Services segment is composed of finance and leasing products and services provided to truck customers and dealers ... Included in All Other is PACCAR's industrial winch manufacturing business. Also within this category are other sales, income and expenses not attributable to a reportable segment, including a portion of corporate expense. Business Segment Data ($ millions) 2009 2008 2007 Truck $25.9 $1,156.5 $1,352.8 All other 42.2 6.0 32.0 68.1 1,162.5 1,384.8 Financial services 84.6 216.9 284.1 Investment income 22.3 84.6 95.4 $175.0 $1,464.0 $1,764.3 Exhibit 2. Excerpt from MD&A of PACCAR's 2009 Annual Report Net sales and revenues and gross margins for truck units and aftermarket parts are provided below. The aftermarket parts gross margin includes direct revenues and costs, but excludes certain truck segment costs. 2009 2008 % Change Net Sales and Revenues Trucks $5,103.30 $11,281.30-55 2009 2008 % Change Net Sales and Revenues Trucks $5,103.30 $11,281.30-55 Aftermarket parts 1,890.70 2,266.10 -17 $6,994.00 $13,547.40 -48 Gross Margin Trucks - $46.6 $1,141.70 - 104 Aftermarket parts 625.7 795.20 -21 $579.1 $1,936.90 -70 Which of the following is correct? The firm's financial statements can mislead the analysts to believe that it has high liquidity. The firm's financial statements can mislead the analysts to believe that it has high proht. YOTE Gross Margin Trucks -$46.6 $1,141.70 -104 Aftermarket parts 625.7 795.20 -21 $579.1 $1,936.90 -70 Which of the following is correct? The firm's financial statements can mislead the analysts to believe that it has high liquidity. The firm's financial statements can mislead the analysts to believe that it has high profit. No answer text provided. The firm's financial statements can mislead the analysts to believe that it has high revenue