Question

For a global screen, which of the following formulas requires a currency argument to provide the users with an apples-to-apples comparison across countries and regions?

A. FF_PSALES(ANN_R,0) (Price to Sales)
B. P_PRICE_RETURNS(2,12/31/-1,0) (YTD Total Return)
C. FF_NET_MGN(ANN_R,0) (Net Income Margin)
D. All of the above

Answer 1

All financial metrics, including Price to Sales (A), YTD Total Return (B), and Net Income Margin (C), require a currency argument for meaningful comparison across different currencies, thus the answer is D. All of the above.

Step-by-step explanation:

When performing a global screen involving financial metrics of different countries and regions, the inclusion of a currency argument is essential to achieve an 'apples-to-apples' comparison. This need arises when attempting to ensure that figures from different economies are comparable, accounting for differences in purchasing power and exchange rates. Particularly, measures like purchasing power parity (PPP) or the use of international dollars function to harmonize data. Among the options provided:

• A. FF_PSALES(ANN_R,0) (Price to Sales) - might require conversion to compare sales figures meaningfully across currencies.
• B. P_PRICE_RETURNS(2,12/31/-1,0) (YTD Total Return) - necessitates currency adjustment to accurately reflect returns in a consistent currency.
• C. FF_NET_MGN(ANN_R,0) (Net Income Margin) - could demand currency conversion to ensure net income margins are on equivalent terms.

Every metric that involves financial figures that would differ based on the currency used would benefit from such a conversion to provide clarity and comparability. Therefore, the answer is D. All of the above.