Last visit was: 19 Nov 2025, 15:41

It is currently 19 Nov 2025, 15:41

Toolkit

Practice Tests

Sentence Correction (SC - EA only)

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Go to My Error Log Learn more

Request Expert Reply

Confirm Cancel

Nov 20
UCR MBA Impact - Live Q&A with UCR AdCom & Student
07:30 AM PST
-
08:30 AM PST
Learn what truly sets the UC Riverside MBA apart and how it helps in your professional growth
Nov 22
GMAT RC Masterclass
11:00 AM IST
-
01:00 PM IST
Do RC/MSR passages scare you? e-GMAT is conducting a masterclass to help you learn – Learn effective reading strategies Tackle difficult RC & MSR with confidence Excel in timed test environment
Nov 23
Conquer Algebra on the GMAT Focus Edition
11:00 AM IST
-
01:00 PM IST
Attend this free GMAT Algebra Webinar and learn how to master the most challenging Inequalities and Absolute Value problems with ease.
Nov 25
Try OnDemand GMAT Masterclass
10:00 AM EST
-
11:00 AM EST
Prefer video-based learning? The Target Test Prep OnDemand course is a one-of-a-kind video masterclass featuring 400 hours of lecture-style teaching by Scott Woodbury-Stewart, founder of Target Test Prep and one of the most accomplished GMAT instructors.

Back to Forum

Create Topic

Formulas for cash flow and the ratio of debt to equity do not apply to

1 2

e100

Joined: 11 Jun 2016

Last visit: 09 Dec 2022

Posts: 33

Own Kudos:

Given Kudos: 48

Location: Azerbaijan

GPA: 3.76

Posts: 33

Kudos: 5

26 Dec 2019, 11:56

Kudos

Bookmarks

egmat, could you please explain?

Diya52

Joined: 21 Nov 2018

Last visit: 26 May 2025

Posts: 138

Own Kudos:

128

Given Kudos: 123

Location: India

GPA: 3.5

Products:

Posts: 138

Kudos: 128

16 Jan 2020, 23:17

Kudos

Bookmarks

Formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses, because they are growing and are seldom in equilibrium.

(A) Formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses, because they are growing and are seldom in equilibrium.

(B) Because they are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses.

(C) Because they are growing and are seldom in equilibrium, new small businesses are not subject to the same applicability of formulas for cash flow and the ratio of debt to equity as established big businesses.

(D) Because new small businesses are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to them in the same way as to established big businesses.

(E) New small businesses are not subject to the applicability of formulas for cash flow and the ratio of debt to equity in the same way as established big businesses, because they are growing and are seldom in equilibrium.

A. They can refer to formulas, small businesses, big businesses. The referent is unclear.
B. The subject should be new small businesses since they are the one growing and not the formulas
C. Same applicability might have a better version in the other answer choices. The sentence structure should be are not subject to the same….as established big businesses are.
D. Correct answer. Parallel structure - do not apply (better than applicability)to them in the same way as to established big businesses.
E. Same issues as in C.

Kritisood

Joined: 21 Feb 2017

Last visit: 19 Jul 2023

Posts: 492

Own Kudos:

1,272

Given Kudos: 1,090

Location: India

GMAT 1: 700 Q47 V39 Verified score

Products:

GMAT 1: 700 Q47 V39 Verified score

Posts: 492

Kudos: 1,272

17 Jan 2020, 00:52

Kudos

Bookmarks

DmitryFarber

The point about "are" is that C says that small businesses "are not subject to the same XYZ as big businesses." It would be helpful to provide an "are" to complete the comparison: "small businesses are not subject to the same XYZ as are big businesses."

In a simple sentence, we don't need this clarification:

I'm not as strong as you.

But in a sentence with even a slight bit more complexity, that verb can make a big difference. Compare these:

I'm more interested in economics than you.
I'm more interested in economics than you are.

We would probably figure out the intended meaning in the first case (especially if we consider ourselves more interesting than economics), but the second is clearer.

Now look at a sentence with a more involved second half:

The singer is less excited about the concert than the legions of fans seeking her autograph.

This sentence is truly ambiguous. Is she more excited about the fans than about the concert (notice my second "about" to make that clear), or are the fans more excited about the concert than she is? Let's rewrite to indicate the former meaning and then the latter:

The singer is less excited about the concert than about the legions of fans seeking her autograph.
The singer is less excited about the concert than are the legions of fans seeking her autograph.

Here, we put the "are" before that long noun phrase at the end just to make it easier to catch. We could technically put it at the end, but it would be less useful there--by the end, either you've interpreted the meaning correctly or you haven't, and so it's better to make the intended meaning clear sooner.

Hi Dmitry

As per what you've explained for C, the same way in option D should it not be "same was they do to established big businesses"

Because new small businesses are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to them in the same way as they do to established big businesses.

shubham88

Joined: 24 Oct 2016

Last visit: 20 May 2023

Posts: 62

Own Kudos:

Given Kudos: 71

Location: India

Schools: Foster '24 (I) McCombs '24 (D)

GMAT 1: 640 Q49 V29 Verified score

GMAT 2: 720 Q49 V39 Verified score

Schools: Foster '24 (I) McCombs '24 (D)

GMAT 2: 720 Q49 V39 Verified score

Posts: 62

Kudos: 14

30 Jul 2020, 11:36

Kudos

Bookmarks

Hi all,
I have a doubt, can pronouns such as they refer to a compound subject made of 2 singular nouns?

Thanks

aritrar4

Current Student

Joined: 12 Jun 2020

Last visit: 06 Sep 2024

Posts: 103

Own Kudos:

[2]

Given Kudos: 147

Location: India

Schools: S.P.Jain Institute (A) IIMA PGPX'23 (A) IIMC MBAEx'23 (A) ISB '23 (I) IIMB EPGP'23 (D)

GMAT 1: 680 Q47 V35 Verified score

GMAT 2: 690 Q49 V34 Verified score

GMAT 3: 710 Q50 V35 Verified score

GPA: 3.73

Products:

Schools: S.P.Jain Institute (A) IIMA PGPX'23 (A) IIMC MBAEx'23 (A) ISB '23 (I) IIMB EPGP'23 (D)

GMAT 3: 710 Q50 V35 Verified score

Posts: 103

Kudos: 93

[2]

09 Oct 2020, 23:34

Kudos

Bookmarks

AndrewN, could you please help me with a doubt here?

(C) Because they are growing and are seldom in equilibrium, new small businesses are not subject to the same applicability of formulas for cash flow and the ratio of debt to equity as established big businesses.
I understand the confusion in the comparison here, it could mean 2 things
- the formulas and the ratio are not applicable to big businesses in the same way - intended meaning
- small businesses are not applicable to big businesses - distorted meaning
and so option C is incorrect here.

(D) Because new small businesses are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to them in the same way as to established big businesses.
For option D however, I am confused whether the comparison "as to established big businesses" is 100% unambiguous. I feel it has an ellipse in the second part to avoid using the ambiguous "they" that other options are using.

Because new small businesses are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to them in the same way as (formulas and the ratio of debt to equity apply) to established big businesses.
- Is this the right ellipse in the second part of the comparison or there can be other potential ellipses?

Thanks for your help !

AndrewN

Volunteer Expert

Joined: 16 May 2019

Last visit: 29 Mar 2025

Posts: 3,502

Own Kudos:

7,511

[1]

Given Kudos: 500

Expert

Expert reply

Posts: 3,502

Kudos: 7,511

[1]

10 Oct 2020, 04:20

Kudos

Bookmarks

aritrar4

Hello, aritrar4. I thought I was going to have my work cut out for me when I saw such a lengthy post, but you have it just right. In choice (D), it is perfectly acceptable to say, [conditions] do not apply to A in the same way as to B, and yes, we are most certainly comparing whether all of formulas and the ratio of debt to equity may apply between A, new small businesses, and B, established big businesses. Well done on this one. Your post can serve as a guide to other onlookers, and for that, paired with the specificity of your query, I thank you. Kudos from me. (Keep up the good work.)

- Andrew

pk6969

Joined: 25 May 2020

Last visit: 02 Jan 2022

Posts: 136

Own Kudos:

Given Kudos: 70

Location: India

Concentration: Finance, General Management

Schools: Babson CBS '23 Broad

GPA: 3.2

Schools: Babson CBS '23 Broad

Posts: 136

Kudos: 14

02 Sep 2021, 04:58

Kudos

Bookmarks

goalsnr

Show Spoiler

I spent 5 minutes on this question and finally got it right. Is there a quicker way to solve this beast?

In A, the they after because is ambiguous; it seems illogically to refer to Formulas because they and Formulas are each the grammatical subject of a clause and because the previous they refers to Formulas. In A and B, do not apply to… in the same way s they do to is wordy and awkward. D, the best choice, says more concisely in the same way as to. Also in B, because they refers to formulas, the introductory clause states confusedly that the formulas are growing. In C and E, subject to the [same] applicability of... is wordy, awkward, and imprecise; furthermore, are is preferable to either before or after established big businesses to complete the comparison. Finally, the referent of they is not immediately clear in E.

Attachment:

CR 32.jpg

Hi! The way I saw this question both C and D have some flaws. In C I know that comparison is not unambiguous but the second interpretation(are subject to applicability of xxxx----as "of" big businesses) just doesn't make sense. In D, they is used and it has some pronoun ambiguity( formulas ) but again its not logical for it to refer back to formulas . So, in such a situation comparison ambiguity should triumph over pronoun ambiguity?? IanStewart AndrewN GMATNinja

IanStewart

GMAT Tutor

Joined: 24 Jun 2008

Last visit: 18 Nov 2025

Posts: 4,145

Own Kudos:

10,989

[1]

Given Kudos: 99

Expert

Expert reply

Posts: 4,145

Kudos: 10,989

[1]

02 Sep 2021, 06:14

Kudos

Bookmarks

pk6969

That's not really a consideration here. Only C, D and E correctly convey that it's the small businesses, and not the formulas, that are growing, so one of those answers must be right. But in C and E, the phrase "subject to the same applicability of formulas for cash flow" is just nonsense in English. No correct answer could ever include language like that, so regardless of any ambiguity you might detect in D (I don't see any, but I suppose some people might wonder about the "them"), answer D is the only possible answer.

Crytiocanalyst

Joined: 16 Jun 2021

Last visit: 27 May 2023

Posts: 950

Own Kudos:

208

Given Kudos: 309

Posts: 950

Kudos: 208

02 Sep 2021, 07:13

Kudos

Bookmarks

goalsnr

(A) Formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses, because they are growing and are seldom in equilibrium.
They reference isn't perfect as it creates ambiguity therefore out

(B) Because they are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses.
This gives us a meaning as though the formulaes are not in equilibrium therefore out

(C) Because they are growing and are seldom in equilibrium, new small businesses are not subject to the same applicability of formulas for cash flow and the ratio of debt to equity as established big businesses.
They is not having the right reference therefore out

(D) Because new small businesses are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to them in the same way as to established big businesses.
The meaning is perfect therefore let us hang on to it

(E) New small businesses are not subject to the applicability of formulas for cash flow and the ratio of debt to equity in the same way as established big businesses, because they are growing and are seldom in equilibrium.
The meaning isn't right therefore out

Therefore IMO D

[spoiler=]I spent 5 minutes on this question and finally got it right. Is there a quicker way to solve this beast?

nikitathegreat

Joined: 16 Dec 2021

Last visit: 18 Nov 2025

Posts: 201

Own Kudos:

Given Kudos: 110

Location: India

Schools: ISB '23 LBS '24 NTU NUS Said '23

GMAT 1: 630 Q45 V31 Verified score

Products:

Schools: ISB '23 LBS '24 NTU NUS Said '23

GMAT 1: 630 Q45 V31 Verified score

Posts: 201

Kudos: 22

18 Jan 2023, 07:39

Kudos

Bookmarks

DmitryFarber

Formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses, because they are growing and are seldom in equilibrium.

(A) Formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses, because they are growing and are seldom in equilibrium.

Here, the logical referent for "they" is small businesses. Then why is this option wrong?

(B) Because they are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses.

The second part should start with small businesses

(C) Because they are growing and are seldom in equilibrium, new small businesses are not subject to the same applicability of formulas for cash flow and the ratio of debt to equity as established big businesses.

As when used in comparison should be followed by a clause. Here as is followed by a noun and hence the choice is incorrect?

(D) Because new small businesses are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to them in the same way as to established big businesses.
Here as is followed by a preposition phrases and this usage is correct.

(E) New small businesses are not subject to the applicability of formulas for cash flow and the ratio of debt to equity in the same way as established big businesses, because they are growing and are seldom in equilibrium.

Same problem as in C

KarishmaB

Tutor

Joined: 16 Oct 2010

Last visit: 19 Nov 2025

Posts: 16,267

Own Kudos:

77,001

[1]

Given Kudos: 482

Location: Pune, India

Expert

Expert reply

Posts: 16,267

Kudos: 77,001

[1]

18 Jan 2023, 22:19

Kudos

Bookmarks

nikitathegreat

DmitryFarber

The first 'they' refers to formulas and the 'they' in the dependent clause refers to small businesses. It could potentially refer to 'big businesses' or 'formulas'. Someone who doesn't already know that small businesses are seldom in equilibrium could get confused. The point is - do you have a better option?

nikitathegreat

(B) Because they are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses.

The second part should start with small businesses

(C) Because they are growing and are seldom in equilibrium, new small businesses are not subject to the same applicability of formulas for cash flow and the ratio of debt to equity as established big businesses.

As when used in comparison should be followed by a clause. Here as is followed by a noun and hence the choice is incorrect?

Yeah, we would like to have a verb - 'as are established big businesses' if given a choice.
Also, 'applicability of formulas' is inferior to 'formulas do not apply...' - verb forms are stronger since they clarify who is performing the action.

nikitathegreat

(D) Because new small businesses are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to them in the same way as to established big businesses.
Here as is followed by a preposition phrases and this usage is correct.

(E) New small businesses are not subject to the applicability of formulas for cash flow and the ratio of debt to equity in the same way as established big businesses, because they are growing and are seldom in equilibrium.

Same problem as in C

Raman109

Joined: 17 Aug 2009

Last visit: 28 Jul 2025

Posts: 805

Own Kudos:

170

Given Kudos: 33

Posts: 805

Kudos: 170

Updated on: 29 Nov 2023, 06:28

Originally posted by Raman109 on 02 Sep 2023, 06:10.
Last edited by Raman109 on 29 Nov 2023, 06:28, edited 1 time in total.

Kudos

Bookmarks

Formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses, because they are growing and are seldom in equilibrium.

Option Elimination -

(A) Formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses, because they are growing and are seldom in equilibrium. - Using "they" in the same sentence for two different nouns is incorrect.

(B) Because they are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to new small businesses in the same way as they do to established big businesses. - "formulas" are growing? Wrong.

(C) Because they are growing and are seldom in equilibrium, new small businesses are not subject to the same applicability of formulas for cash flow and the ratio of debt to equity as established big businesses. - removing the modifiers, the core is "small businesses are not subject to the applicability of formulas as big businesses." Wrong. We need "to." Moreover, "subject to the applicability" is an inferior way to say "apply to them," which is elegant and concise. To convey an action, use "verb" and not "noun."

(D) Because new small businesses are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to them in the same way as to established big businesses. Ok. "to" is good. The expanded sentence states, "Because new small businesses are growing and are seldom in equilibrium, formulas for cash flow and the ratio of debt to equity do not apply to them in the same way as (they do) to established big businesses." "them" and "they" both logically refer to "formulas."

(E) New small businesses are not subject to the applicability of formulas for cash flow and the ratio of debt to equity in the same way as established big businesses, because they are growing and are seldom in equilibrium. - Issue of "the applicability," no "to" preposition.

bhavyasinghal

Joined: 22 Apr 2023

Last visit: 29 Aug 2024

Posts: 7

Given Kudos: 65

Location: India

Schools: Cornell '26 Stern '26 Columbia CBS'26 Darden '26 Yale '26 Ross '26 Booth '26

Posts: 7

Kudos: 0

31 Oct 2023, 00:23

Kudos

Bookmarks

Three reason to eliminate (C) and choose (D) are:-

1.) Ambiguity in comparison concept:- "I love bio more than my wife"

Option (D) leaves no room for ambiguity but option (C) does as stated by many other people.

2.) Thouth its not 100% true but if stuck between C and D we can also use VAN between apply (verb)/ applicability (noun).--->> Verbs are always preferred if no other critical mistake can be found in an answer choice.

3.) In option (C) and (E) the use of "subject to the same applicability of formulas" is quite complex and wrong english."Apply in the same way " gives the meaning in a more consise and simple way and verbs are always prefereed on GMAT.

1 2

Moderators:

GMATNinja

GMAT Club Verbal Expert

7443 posts

GMATNinjaTwo

GMAT Club Verbal Expert

231 posts

miag

189 posts