The EBIT-EPS analysis tends to concentrate on maximization of earnings rather than maximization of owners' wealth.

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The EBIT-EPS analysis focuses on determining the level of earnings before interest and taxes (EBIT) needed to achieve a target earnings per share (EPS), which may not necessarily result in the maximization of owners' wealth. This is because the analysis only considers the impact of changes in EBIT on EPS, without taking into account factors such as the cost of capital or the level of risk involved in the investment decision. Therefore, while the EBIT-EPS analysis is a useful tool for evaluating alternative financing options, it should be used in conjunction with other analyses to make informed investment decisions that maximize owners' wealth.

The EBIT-EPS Analysis Tends to Concentrate on Maximization of Earnings