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

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

Thanks

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 !

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

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

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.

(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?

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

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?




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.

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.

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.