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Focus on financial documents....we begin with Income statement...recap, how it is prepared and explain the difference...

Focus on financial documents....we begin with Income statement...recap, how it is prepared and explain the difference between earnings per share and dividends per share. Can these values equal? When? Use at least one reference and cite in APA format.

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Answer #1

Income statement is prepared from trial balance which shows us all , balances incomes ,expenditure, losses , assets and liabilities. All gains,incomes should be credited in income statement and all losses and expense should be debited, resulting credit balance will be considered as net profit and resulting debit balance considered as net loss.

Earning per share means earnings after tax and dividend divided by number of equity shareholders. On the other hand, dividend per share means amount distributed as dividend to shareholders divided by number of shareholders.

Yes ,EPS and DPS can be equal when dividend payout ratio is 50 percent. 50 percent of PAT is being paid as dividend and remaining 50 percent will be considered as earning for shareholders.

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