Sometimes Analysts Use Other Ratios Such as Price-To-Book or Price-To-Sales

question 29

Multiple Choice

Sometimes analysts use other ratios such as price-to-book or price-to-sales ratio. Which of the following is a weakness of the use of these ratios?

• A) Some companies are structured very differently, especially across industries.
• B) A price-to-book value less than one cannot be assessed.
• C) A high price-to-sales ratio cannot be assessed.
• D) The price-to-sales ratio cannot be used for companies that report a net loss.

Acknowledge the suitability of team evaluations for companies with a total-quality management philosophy.

Identify the training needs for supervisors in performance evaluation programs.

Describe the bias and subjectivity in trait and results-oriented methods.

Understand the time consumption and drawbacks of the essay method in performance evaluations.

---

Definitions:

Quality Costs

The total costs associated with ensuring products or services meet quality standards, including prevention, appraisal, and failure costs (both internal and external).

Quality Costs

The total costs associated with preventing defects, appraising the quality of products, and the costs related to failures, both internal and external.

Productive Inefficiency Cost

Costs incurred due to not utilizing resources in the most efficient way, leading to higher production costs or wasted resources.

External Failure Cost

Costs associated with defects found after the product is delivered to the customer, including returns and warranties.