Which of the Following Is the Major Limitation of Using

question 31

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 may be important factors for evaluation.
• D)It cannot be converted from a foreign currency to a domestic currency.

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Definitions:

Financial Data

Refers to information related to the financial performance of an entity, including income, expenses, assets, and liabilities.

Sales On Account

Transactions where goods or services are sold and payment is deferred to a future date, essentially selling on credit.

Cost Of Goods Sold

The costs directly connected with generating the goods a firm sells to its customers.

Operating Cycle

The duration of time it takes for a company to purchase inventory, sell products, and collect cash from customers.