Answer
The student cannot cancel out the $x^2$ terms.
Work Step by Step
In order to simplify these expressions, we look for common factors in the numerator and the denominator. This means that we need to be sure that the numerator and denominator are in fully factored form. Doing this, we find:
$$\frac{\left(x-4\right)\left(x+20\right)}{\left(x+4\right)\left(x-4\right)}\\ \frac{x+20}{x+4}$$
