Critics of EPS as a Measure of Profitability Point Out

question 58

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.