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9.11 If you were interested in evaluating the profitability of a company and could have only...

9.11 If you were interested in evaluating the profitability of a company and could have only limited historical data. Would you prefer to know operating income for the past five years ? Explain.

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Answer #1

Yes, operating income information is vital because:-

1. It is the indicator of the company's core business profitability.

2. It gives a real picture of the company profits because interest and taxes are excluded.

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