A为什么不对

问题如下：

Which financial statement forecasting approach is best suited for companies in highly cyclical industries?

选项：

A.Historical results

B.Management guidance

C.Analyst's discretionary forecasts

解释：

Solution

1. Incorrect because historical results are best suited for companies' relative insensitivity to changes in macroeconomic factors. Using historical results may be appropriate for companies operating in industries where the analyst does not expect the industry structure (e.g., Porter’s Five Forces, PESTLE influences) to change, as well as for companies that have a low sensitivity to changes in the business cycle.

2. Incorrect because management does not have an informational advantage over investors at forecasting macroeconomic variables. Using guidance for forecasts is appropriate when it is provided and when management has demonstrated a track record of reliable estimates (analysts should analyze past guidance versus actuals). We caution against the use of guidance for companies that are highly sensitive to the business cycle, as management does not have an informational advantage over investors at forecasting macroeconomic variables like GDP or the prices of commodities.

3. Correct because analyst’s discretionary forecasts include those based on surveys, quantitative models, probability distributions, analogies to historical precedents that differ from comparable companies or industry averages, and other unobservable inputs. This approach is most common for companies in cyclical industries, companies that have no or few comparables, those that do not provide management guidance, and/or those undergoing a fundamental change like a shift in the competitive or regulatory environment.

Company Analysis: Forecasting

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