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Problems of profit based measures
- Absolute profit measures ignore the amount of investment in the division e.g. does not look at profit relative to capital employed.
- So many different measures of profitability and profit terminology.
- Practical and political problems when addressing 'uncontrollable' expenditure.
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The provision of services or products that offer advantages different from those of competitors and that are widely valued by purchasers.
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Limitations of economic value added (EVA) - Not well understood by users of accounts. - Divisions of different sizes cannot be relatively compared. Similarities of EV
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