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It doesn't take into account important differences between firms. For example, good management of one firm or the efficient production process of another firm. Such differences are ignored. Another limitation is that it only provides information about the value of the firm relative to other firms.
(Berk and DeMarzo, 2011)
What else can I help you with?
Are there limitations to the correlations method?
No
Inventory valuation Method?
Following are inventory valuation methods: 1 - Lifo (Last in first out) 2 - Fifo (First in first out) 3 - Average method.
What is Target Store method of inventory valuation?
lifo
Which method do you follow to find the valuation of a company and why?
I need answer...!
What is Weighted Average of Inventory Valuation Method?
Weighted average inventory valuation method is method in which inventory purchased at any price is put together to calculate one price for allocation in contrast to FIFO or LIFO.
What are the limitations of tendering as a method of purchasing?
credit
What are the limitations of sand replacement method?
geargrgtrehr
What is the inventory valuation method that results in the lowest taxable income in a period of inflation?
LIFO method
What are the limitations of a scientific method in research?
windblown experiment
What are the limitations for high-low method in accounting?
churvaness
What are the limitations for high low method in accounting?
churvaness
What are the non real numbers?
valuation method of goodwill and show detail
