Critics of EPS as a Measure of Profitability Point Out

question 30

Multiple Choice

Critics of EPS as a measure of profitability point out that it does not consider:

• A) simple capital structures.
• B) the amount of assets or capital required to generate a particular level of earnings.
• C) the deduction of preferred stock dividends from net income.
• D) adjustments for dilutive securities and the adjustment to weighted average number of shares outstanding for complex capital structures.

---

Definitions:

Independent Means

A statistical method comparing the means of two independent groups to assess whether there is a significant difference.

Participants

Participants are individuals who take part in a research study, contributing data for analysis.

Standard Deviations

Another term for how much individual data points in a set deviate from the mean or average, helping in assessing data dispersion.

Standard Error

The standard deviation of the sampling distribution of a statistic, often used as an estimate of the uncertainty of a sample mean.