Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 2 - A Further Look at Financial Statements - Questions: 6

Answer

Lorie is not correct.

Work Step by Step

There is much more to financial statement analysis than simply measuring liquidity and profitability. The most prominent oversight by Lorie is that she is not considering external influences. For example, Napster was at one point profitable and very liquid, but that did not end up very well because of government regulation. There is much to consider within financial statement analysis.
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