In his follow-up analysis relating to Conclusion 3, Martinez should focus on Stellars: A. total accruals. B.
Question:
In his follow-up analysis relating to Conclusion 3, Martinez should focus on Stellar’s:
A. total accruals.
B. discretionary accruals.
C. non-discretionary accruals.
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