An analyst is assessing a company that entered into a take-or-pay contract during the
A. The company’s financial statements must be adjusted before the analyst compares this company to other companies in its industry.
B. Despite the off-balance sheet nature of take-or-pay contracts and operating leases, an attempt to determine the actual financial position of the company can be garnered from the footnotes.
C. The take-or-pay contracts and operating leases mean that this company has much higher business risk than similar companies that do not use off-balance sheet financing techniques.