Which of the Following Is the Major Limitation of Using

question 23

Multiple Choice

Which of the following is the major limitation of using EBITDA for analyzing foreign financial statements?

• A)It is nearly impossible for most financial analysts to calculate this number.
• B)Few analysts understand what this earnings number represents.
• C)The excluded items with this approach may have implications for determining the value of firms under evaluation.
• D)It cannot be converted from a foreign currency to a domestic currency.

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Definitions:

Tax Revenue

The money that is amassed by governments as a result of taxation.

State Income Tax

A tax imposed by a state on the income of its residents and on income earned within the state by nonresidents.

Sales Taxes

Taxes imposed on sales of goods and services, typically calculated as a percentage of the selling price.

Tax Revenue

The financial income governments receive through taxing.