![]() ![]() ![]() Most companies use a weighted average number of common shares for the reporting term for greater accuracy. To calculate earnings per share, the company’s income statement and balance sheet are used to find net income, dividends paid on preferred stock, and end number of common shares. The EPS is usually reported on a quarterly or annual basis. Generally, the higher the EPS number, the more profitable the company. However, earnings per share can be adjusted for share dilution or extraordinary items, which we’ll explore below. The EPS figure is determined by dividing the company’s net profit by its outstanding shares of common stock. What is earnings per share?Įarnings per share indicates a company’s profitability by showing just how much money a business makes for each share of its stock. Here’s what you need to know in order to calculate earnings per share. Earnings per share, or EPS, is a common metric used to assess corporate value. ![]()
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