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

(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.

Pronoun mistake “they”

(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.
pronoun “they”

(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.
wrong use for “as”

(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.

correct answer

(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.

wrong use for “as”

egmat, could you please explain?

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.

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.

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

Thanks

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

(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

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.