Question

The Management Discussion and Analysis (MD&A) is of potential interest to the analyst because it contains information that _______

a. Is only found in the financial data.
b. Is not relevant to financial analysis.
c. Cannot be found in the financial data.
d. Is summarized in the footnotes to the financial statements.

Answer 1

The MD&A is important for analysts because it provides insights that are not available in the quantitative financial data, helping investors make informed decisions. The correct option is C.

Step-by-step explanation:

The Management Discussion and Analysis (MD&A) is of potential interest to the analyst because it contains information that cannot be found in the financial data. The MD&A section offers insights into the management's perspective on the company's financial condition, operating results, and future prospects.

This information is especially valuable to stakeholders like bondholders and shareholders who, not knowing the managers personally, rely on transparent information to make informed investment decisions.