Question

Briefly explain what you understand by Earnings per share (EPS). How is EPS calculated and why...

Briefly explain what you understand by Earnings per share (EPS). How is EPS calculated and why it is important for investors to gauge the value of a share?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Earning per share is a earning capacity of an entity towards its one share. Basically it is the amount of companies profit that is allocated to every individual shareholder of the company.

EPS is calculated as follows= Net profit attributable to Equity shareholders / Weighted Average No of Equity Shares

It is important for investor to gauge the value of share to know the profitabilty of the company. An investor before buying a share looks into profitability of a company. The higher the EPS of a company, the higher is its profitability.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Which of the following reasons best explains why earnings per share (EPS) is such a popular...
Which of the following reasons best explains why earnings per share (EPS) is such a popular measure to evaluate a company? Multiple Choice EPS makes it easy to compare one company with another. EPS is an excellent measure of how efficiently long-lived assets are being utilized. EPS provides information that investors can factor into their expectations about future dividends and stock prices. EPS provides specific information about the ability of a company to repay its long-term debts.
What is the purpose/importance of Earnings Per Share (EPS) reporting on the Income Statement? What is...
What is the purpose/importance of Earnings Per Share (EPS) reporting on the Income Statement? What is diluted EPS and why must it be computed and reported?
Earnings per share (EPS) over the last 12 months=$2.50 Earnings per share (EPS) over the next...
Earnings per share (EPS) over the last 12 months=$2.50 Earnings per share (EPS) over the next 12 months=$4.00 Current stock price=$45 Number of common shares outstanding=20,000,000 Restricted stock = 1,000,000 Annual dividend per share=$1.50 Expected annual growth rate in earnings over the next 5 years=5% Shares short=1,000,000 Average trading volume=10,000,000 shares 13. What is the market capitalization for YTB? (a) $600m (b) $700m (c) $800m (d) $900m 14. Based on your answer in question 13, YTB is a (a) mid-cap...
What is the difference between earnings per share (EPS), funds from operation (FFO), and dividends per...
What is the difference between earnings per share (EPS), funds from operation (FFO), and dividends per share?
EPS (earnings per share) is not required to be reported in the income statement but is...
EPS (earnings per share) is not required to be reported in the income statement but is optional. a. True b. False 2. Companies report earnings per share for preferred stock, too. a. true b. False 3. Leases similar to installment purchases are capitalized. True False
15. For the earnings per share (EPS) metric used by corporations to characterize financial performance, what...
15. For the earnings per share (EPS) metric used by corporations to characterize financial performance, what do the terms “adjusted” and “diluted” mean?
Solar Energy currently (Year 0) has Earnings Per Share (EPS) of $3 and pays no dividend....
Solar Energy currently (Year 0) has Earnings Per Share (EPS) of $3 and pays no dividend. You anticipate that EPS will grow at a 20% annual rate for the next three years (Years 1, 2 and 3) and then beginning in Year 4 EPS will grow at a constant 5% rate. You project the company will pay dividends of $0.25 per share (Year 1), $0.50 (Year 2), and $0.75 (Year 3). Beginning in Year 4 you anticipate Solar Energy will...
In regards to the presentation of EPS, IFRS requires 1. earnings per share amounts to be...
In regards to the presentation of EPS, IFRS requires 1. earnings per share amounts to be shown for all periods that are presented. 2. If there has been a stock dividend or stock split, all per share amounts of prior period earnings should be restated using the new number of outstanding shares. 3. If diluted EPS data are reported for at least one period, they should be reported for all periods that are presented, even if they are the same...
Table below contains information on the historic earnings per share (EPS) and dividend per share (DPS)...
Table below contains information on the historic earnings per share (EPS) and dividend per share (DPS) for the company. Using the information in the table, calculate the expected dividend growth rate of the company. Answer in the box provided . (A) Historical growth rate PER SHARE DATA EPS Dividend Y2016 2.42 1.52 Y2015 2.55 1.52 Y2014 2.06 1.52 Y2013 2.46 1.37 Y2012 2.00 1.12 (B)   Sustainable Growth Rate for 2016 Assuming that the Return on Equity (ROE) for Flight Centre is...
(i) Explain briefly what you understand by Faraday's law of electromagnetic induction. (ii) How is Faraday's...
(i) Explain briefly what you understand by Faraday's law of electromagnetic induction. (ii) How is Faraday's law applied in the construction of a transformer?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT