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:

Bankruptcy Petition

A legal document filed by an individual or corporation declaring inability to repay debts, thus seeking relief through bankruptcy court.

Liquidated

The process of converting assets into cash or paying off liabilities in the winding up of a business or partnership.

Reorganization Plan

A legal process designed to rapidly restructure a company's finances and operations with the aim of restoring its viability.

Plant Expansion

The process of increasing the physical size or production capacity of a manufacturing facility or plant.