Do you think the answer for this question is correct? The question asks for the ‘least likely’. Should the answer not be C?
Please post the question
Q: An analyst who needs to model and forecast a company’s earnings for the next three years would ‘least likely’ to: A. assume that the key financial ratios be unchanged for the forecast period. B. use common size financial statements to estimate expense as a percentage of net income. C. examine the variability of the predicted outcomes by performing sensitivity or scenario analysis. Per Schweser, the answer is B.
When you model and forecast for the future, everything is in percentage of Sales, not Net Income.
Right…now I get it. I missed the net income part. Thanks NYCAnalyst86!