Based on Martinezs conclusions, Stellars financial statements are best categorized as: A. non-GAAP compliant. B. GAAP compliant,
Question:
Based on Martinez’s conclusions, Stellar’s financial statements are best categorized as:
A. non-GAAP compliant.
B. GAAP compliant, but with earnings management.
C. GAAP compliant and decision useful, with sustainable and adequate returns.
Mike Martinez is an equity analyst who has been asked to analyze Stellar, Inc. by his supervisor, Dominic Anderson. Stellar exhibited strong earnings growth last year; however, Anderson is skeptical about the sustainability of the company’s earnings. He wants Martinez to focus on Stellar’s financial reporting quality and earnings quality.
After conducting a thorough review of the company’s financial statements, Martinez concludes the following:
Step by Step Answer:
International Financial Statement Analysis CFA Institute Investment Series
ISBN: 9780470287668
1st Edition
Authors: Thomas R. Robinson, Hennie Van Greuning CFA, Elaine Henry, Michael A. Broihahn, Sir David Tweedie