Different profitability measures can lead to different performance ranking of firms. In particular, the following may affect the measure and ranking:
A)Use of strict Accounting Profit, or an adjusted figure such as EBITDA
B)The application of accounting standards that vary across countries
C)The time period over which performance is measured
D)All of the above

Question

Quizplus · Accepted Answer

All of the above factors can influence the profitability measure and ranking of firms. The use of different profitability measures such as strict accounting profit or adjusted figures like EBITDA can lead to different rankings of firms, as can the application of accounting standards that differ across countries. Finally, the time period over which profitability is measured can also impact the ranking of firms. Therefore, it is important to carefully consider these factors when evaluating the profitability of firms and comparing their performance.

Different Profitability Measures Can Lead to Different Performance Ranking of Firms