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

Question

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.

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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.

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Official Answer

D

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DmitryFarberMPrep · Accepted Answer

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.

vivesomnium · 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.: Subject of first clause is formulas- formaulas dont apply- so in the clause satrting with because- the subject 'they' stands for formula. Inappropriate, hence 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. Same reason as above - formulas are the subject pointed to by 'they' in the because part of the sentence.Incorrect 
(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. Applicability sounds unidiomatic- also sentence seems to imply that formulas dont apply at all-while the implication should be that the formulas dont apply  in the same way as to the 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. awckward and wordy construction, use of applicability-

huntgmat · Answer

I feel gunned down when I see full underlined questions. ( Hate the poster too :evil:

, just kidding ) I took a bit long ... but not 5 mins ... so here is my POE. As I read the first option , came along "they". (Manhattan SC says it is one of the deadly pronouns ). No clear referent, checked other options for they or them. Eliminate A,B(formulas are growing),E(no clear referent). Between C and D, eliminate C for improper usage of AS. Ans: D

Neochronic · Answer

i am confused between C and D.

the modifier is perfect in C.

in D, 'them' is ambiguous.

but i feel D is better..
confused.. whats the OA ?

TomB · Answer

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.

my doubt is in option D modifying phrase " because new businesses..." correctly modifies the following clause " formulas for cash.."
 Is "them" refers to formulas.
please explain

daagh · Answer

Just to discuss the vexing pronoun reference of the  them , if you have any doubt that  them  may refer to formulas, then just try to replace it with what you think might be correct.

(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  formulas  in the same way as to establish big businesses.
Please ponder whether formulas will apply to formulas. New small businesses is the logical referent.

vomhorizon · Answer

My 2 cents ..

The term - "because they are growing and are seldom in equilibrium" is clearly referring to "small businesses" therefore it must be touching it. In the original sentence it can easily be confused with big businesses i.e. big businesses are growing and are seldom in equilibrium.

Therefore A is 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.

B is suggesting that the formulas for cash flow are growing and are seldom in equilibrium. This is clearly not what the sentence is trying to imply ... (common sense) ...

B is incorrect ..

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.

Clearly the mistake which dogged the statement A and B has been rectified here .. So C can be shortlisted ...

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 same mistake that dogged A and B is now corrected in D , therefore we can shortlist it as a potential 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.

This passage again suggests that established big businesses are growing and seldom in equilibrium .. Therefore it is WRONG ..

We are down to 2 potentially correct choices C & D ...

Out of the two , I think that D delivers the message (that the author of the passage wants to deliver) better, and in a more simplistic form than C . There may well be a grammatical reason for why C is not correct but i have not been able to pin point it. I base my answer on simplicity and clarity..

sheolokesh · Answer

I'm too late on this question. However it could help you. I could find a a clash between "C" and "D"..

In C, "as" is used to compare the 2 nouns (small and big business), which is wrong.
In D, "as" is used to compare the ways used in small and big business that makes it right.

Help me if I am wrong...

kumarashok29 · 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 referring back to Formulas or 'new small businesses'?? Also, it is wordy and unclear construction. 
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.  >> by comma subject rule,    they    referring to  formulas , this is 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 .  >> unclear and wordy construction 
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.  >> clear and concise construction 
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.  >> unclear and wordy construction.  they  referring to??

GGMU · Answer

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.  They is ambiguous 
(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.  Modifier error 
(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.  Comparison error 
(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 
(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  They is ambiguous

daagh · Answer

No need to go beyond kicking out choices that have 'they', namely A, B, C, and E. One cannot decide, whether 'they' refers to big businesses or small businesses or formulas. D is the odd man out that doesn't use the dubious pronoun and one is justified in choosing D instantly.

u1983 · Answer

Option A: Incorrect  : 'They'.....can refer to various nouns such as, 'Formulas/new small businesses/established big businesses'. The closest noun is 'established big businesses'.For the context only 'new small businesses are growing and are seldom in equilibrium' makes sense.

Option B: Incorrect  : 'They'..... refers to the subject of the main clause 'Formulas'. Grammatically 'formulas are growing and are seldom in equilibrium' is correct but quite illogical in meaning in this context.For the context only 'new small businesses are growing and are seldom in equilibrium' makes sense.

Option C: Incorrect  : 'They'.....can refers to various nouns such as, 'Formulas/new small businesses/established big businesses'. The closest noun is 'established big businesses'.For the context only 'new small businesses are growing and are seldom in equilibrium' makes sense.

Option D: Correct   :'Them'..... refers to the subject of the previous clause 'new small businesses'.The wat them is placed before introduction of the comparison, it naturally points to the 'NSB'. ''them' does not refer to 'formulas' as well as they are part of the same clause.

Option E: Incorrect  : 'They'.....can refer to various nouns such as, 'Formulas/new small businesses/established big businesses'. The closest noun is 'established big businesses'.For the context only 'new small businesses are growing and are seldom in equilibrium' makes sense.

AkshdeepS · 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.

(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, C, and E have pronoun ambiguity.

From C and D, D is better.

SonalSinha803 · 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. - the sentence has two plural nouns - formulas and businesses. Thus, it is not clear that to which one is "they" pointing to. Eliminate.

(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. - can formulas grow ?? Nope. Meaning error. Eliminate.

(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.)) - apart from being a bit wordy, which is a secondary issue, the comparison between applicability of formulas in small businesses and established big business is incorrect. Eliminate

(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. - same error as in C.

Thus, D is best.

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Sidharth8 · Answer

A – ‘they’ refers to formula, which garbles the sentence. A is wrong
B – Same as A
C – Changes meaning to imply that formulas do not apply to small businesses at all.
D – correct
E – Awkward
 
D is the right answer

daagh · Answer

Before we solve this question, let's first refresh two basic tenets in general 1. A pronoun cannot refer to two different entities in a sentence. 2. As a matter of style, a verb is preferred over a noun such as between 'apply' and 'applicability.'

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. --  The first 'they' refers to formulas while the second 'they' refers to small businesses.

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. --  In a reversal of roles, the first they refer to small new businesses while the second 'they' refers to formulas.

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.--  The comparison is flawed because, here we are comparing how the small businesses are subject to something directly with established businesses and not how the latter are subject to.

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 preposition 'to' saves the day since the comparison is restored as applicability 'to ' small businesses is now compared to applicability 'to established businesses'. This is the correct choice

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 of flawed compariosn as in C.

gamer23 · Answer

VeritasKarishma   GMATNinja   egmat  please help with option C and E. I think there is no ambiguity in comparison. Isn't it clear that we are comparing the way formulas apply to new business vs big business.... the verb 'are' is ommitted from sentence and ellipses come into play

KarishmaB · Answer

(C) and (E) have multiple irritants.

(C) - the use of "subject to the same applicability of formulas" is quite convoluted. Also, "are" before "established big businesses" would be good to have to ensure clear comparison.

(E) - the use of "subject to the same applicability of formulas" is quite convoluted. Use of "they" is ambiguous. Also, "are" before "established big businesses" would be good to have to ensure clear comparison.

Option (D) takes care of each of these problems and hence is a far better option.

IIVarianceII · 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.

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”

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

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

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