Define earning per share -eps, Financial Management

Assignment Help:

Earning per share

Earnings per share (EPS) are computed as profit attributable to equity divided by the number of shares in issue and ranking for dividends. EPS therefore represents what is available to be paid out as dividends. Clearly so if the number of shares in issue remains fixed the EPS will rise as the net profit attributable to equity increase.

The value of EPS is able to be calculated by dividing the share price by the P/E ratio. For Buntam this signifies EPS equals eight cents. In other prose the earnings per share is equal to the gross dividend payable. For Zellus the EPS is equivalent to 18 cents (270/15) which compares with a gross dividend of nine cents. On first sight thus it is tempting to view Zellus as a better investment because its EPS is higher. On the other side an investor has to pay 270 cents per share to get earning of 18 cents compared with 160 cents to get earning of eight cents. The EPS figure is of narrow value on its own it needs to be judged in conjunction with the share price and hence the P/E ratio.

 


Related Discussions:- Define earning per share -eps

Define implicit cost and explicit costs, Q. Define Implicit cost and explic...

Q. Define Implicit cost and explicit costs? Implicit cost and explicit costs: the implicit cost is the rate of return associated with the best invests opportunity for the firm

Explain the compound interest, What is compound interest? Compare compound ...

What is compound interest? Compare compound interest to discounting. Compound interest takes place while interest is earned on interest and on the original principal of an invest

Determining the appropriate rates in valuation process, After estimat...

After estimating the cash flows, the next step is to determine the appropriate interest rate that should be used to discount the cash flows. The minimum return re

Expansion financing, The securing of the working capital needed for the sup...

The securing of the working capital needed for the support of raises in accounts receivable and inventory related with an organizations initial expansion time.

Convertible bonds, Convertible bonds are the debt instruments issued which ...

Convertible bonds are the debt instruments issued which can be converted after a pre-specified date for a pre-specified number of securities (generally equity stock). I

Long term investement and financial decisions, you would like to purchase a...

you would like to purchase a new car in 3 years.The current value of the vehicle you would like to purchseis 100000.The manufacturer of the vehicle has advised you,that the cost of

Trend analysis, Do you guys provide Trend Analysis assignment help? I need ...

Do you guys provide Trend Analysis assignment help? I need writing a report on Trend Analysis and it is about 2000 words. Let me know. I need to buy your solution.

Design, D esign, Drawing and Bill of Quantities (BOQ) for works We dis...

D esign, Drawing and Bill of Quantities (BOQ) for works We discussed about INCO terms which are set standards for the project. Now let us learn about other parameters for cont

Source documents of an accounting system, Source documents of an accounting...

Source documents of an accounting system: Source documents are those documents that identify the particular transaction that is being recorded.  They act as an internal control

Cost of capital, AThe Nu-Nu Brothers Inc. (NNBI) has the following capital ...

AThe Nu-Nu Brothers Inc. (NNBI) has the following capital structure, which it considers to be optional: Debt 25% Preferred Stock 15% Common Equity 60% NNBI''''s expected net incom

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd