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

Zero base budgets, Zero base budgets: this is a new technique, which was f...

Zero base budgets: this is a new technique, which was first used by the US Department of Agriculture in 1961. Texas instruments, an MNC, have used it in the private sector.  But,

Agency theory, AGENCY THEORY An agency relationship may be defined as a...

AGENCY THEORY An agency relationship may be defined as a contract under which one or more people (the principals) hire another person (the agent) to perform some services on th

Financial services industry role, For this assessment, you will be required...

For this assessment, you will be required to select a role within the financial services industry that interests you. Undertake your own research to find out about the role you hav

Issuing procedure - t-bills, Issuing Procedure Treasury bills are sold ...

Issuing Procedure Treasury bills are sold using the auction procedure. The Treasury entertains both competitive and non-competitive tenders for T-Bills. Government securities f

What is emerging issues task force, Q. What is Emerging Issues Task Force? ...

Q. What is Emerging Issues Task Force? Emerging Issues Task Force (EITF) - Assists FINANCIAL ACCOUNTING STANDARDS BOARD (FASB) and provides guidance on early identification of

Graphic presentation of net operating income approach, Q. Graphic Presentat...

Q. Graphic Presentation of Net Operating Income Approach ? Graphic Presentation of NOI (Net Operating Income) Approach: - NOI (Net Operating Income) approach is explained graph

Amount of the total liabilities, A firm has net working capital of -$800. L...

A firm has net working capital of -$800. Long-term debt is $15,400, total assets are $24,800 and fixed assets are $19,100. What is the amount of the total liabilities.

Treasury auction process, All treasury securities are issued on the b...

All treasury securities are issued on the basis of auction. The auction process is computerized and hence qualified broker-dealers can access it electronically. T

Define mergers affect communities, How do mergers affect communities? A: ...

How do mergers affect communities? A: While a locally controlled bank is merged into a bank headquartered somewhere else (an out-of-market merger), a few apprehension about the i

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