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Why is it difficult to compare the size of different businesses?
Wiki User
∙ 12y ago
Because there are 4 types of factors you have to check to compare the sizes of businesses. There are problems for each factor. The first factor is Comparing business size by the number of employees. The problem with this is that some large businesses use a lot of machinery. The second sector is Comparing business size by value of output and sales. The problem with this is that a firm which sells a small number of expensive goods can have a higher turnover than another firm which sells a large number of inexpensive goods. The third factor is Comparing business size by capital employed. The problem with this is that some businesses might have a lot of workers and very little machinery. The fourth factor is Comparing business size by profit. The problem with this is that a business may have invested a low capital and have many staff but profits could be low.
Sorry for the long answer and hope it helped :D
Wiki User
∙ 12y ago
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