Relying on Absolute Values in an Entity's Financial Statements to Predict

Multiple Choice

Relying on absolute values in an entity's financial statements to predict future risks is not meaningful because:

A) an increase in the profit figure does not necessarily indicate an increase in the profitability of the entity.
B) an increase in non-current liabilities does not necessarily mean the entity has become more reliable on external funding.
C) an increase in current liabilities does not necessarily mean the entity is having liquidity problems.
D) all of the above statements are correct.