what mist accurately describes EPS

Expert Solution

Earnings per share or EPS is an important financial measure, which indicates the profitability of a company i.e how company perform year on year it may decrease or increase . It is calculated by dividing the company’s net income available for equity share holders with its total number of outstanding equity shares .It also indicates return or income per share,whether or not distributed as dividends. EPS is a financial tool that market participants use frequently to analyse the company performance year on year basis or quarterly compare also so the participants decide the company is performing well or not..

EPS is the portion of a company’s profit that is allocated to every individual share of the stock.. It is a term that is of much importance to investors and people who trade in the stock market. The higher the earnings per share of a company, the better is its profitability..A higher EPS indicates more value because investors will pay more for a company with higher profits.

EPS=[PAT-Preference Dividend]/no. of equity share

Eps is ls also used to calculate the dividend per share and price-earning ratio

EPS is also used by the investors to compare the two or more company together so that investor can choose proper company to invest to increase there wealth EPS is very important and crucial tool for investors, it should not be looked at in isolation. EPS of a company should always be considered in relation to other companies in order to make a more informed and prudent investment decision..

so we cam say EPS is one of the main financial tools which indicates the financial position of a company .or growth of a company or organisation or industry .

ekkarill92 answered 2 years ago

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