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Question
Earnings per share (EPS) data are prominent in corporate annual reports, but EPS suffers as a financial performance measure because EPS ignores the amount of
A. revenue required to generate reported earnings.
B. capital required to generate reported earnings.
C. liabilities required to generate reported earnings.
D. expenses required to generate reported earnings.
Answer
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Because covenant compliance can be jeopardized by mandated changes in accounting principles, many loan agreements have financial covenants that rely on the accounting rules in place when the loan is first granted.
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A. only the administrative costs of operations.
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A. affirmative restrictions.
B. affirmative covenants.
C. negative restrictions.
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B. borrowers.
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B. the consignee.
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