One disadvantage of using after-tax income as a performance measure of divisional results is it's an absolute measure which makes it difficult to compare divisions of significantly different sizes.Larger divisions will naturally show larger income than a smaller division would.

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After-tax income is an absolute measure of divisional results, meaning that it does not consider the size of the division. This can create difficulties in comparing divisions of significantly different sizes because larger divisions will naturally show larger income than smaller divisions, even if their performance is comparable. Therefore, using after-tax income as a performance measure may present an unfair advantage to larger divisions.

One Disadvantage of Using After-Tax Income as a Performance Measure