Traditional Culture Encyclopedia - Traditional festivals - What is the difference between earnings per share and earnings per share
What is the difference between earnings per share and earnings per share
I'll explain, from the surface of the earnings per share and earnings per share is apparently the same, but these two words have a fundamental difference, the difference is that the so-called earnings per share, also known as profit per share after tax, earnings per share, refers to the ratio of after-tax profit to the total amount of share capital. It is one of the important indicators for determining the investment value of a stock, a fundamental indicator for analyzing the value of each share, and an important indicator for comprehensively reflecting the profitability of a company, which is the ratio of the company's net income to the number of shares in a certain period. The formula for calculating basic earnings per share is as follows: Basic earnings per share = Net income attributable to common shareholders for the period ÷ Weighted average number of common shares outstanding for the period The traditional formula for calculating the earnings per share indicator is: Earnings per share = (Net income - Preferred dividends) / Number of common shares outstanding at the end of the period Earnings per share is simply the after-tax profit per share. Earnings per share is simply profit after tax per share, and can be calculated by dividing the company's profit after tax by the total number of shares in the company. For example, if a publicly traded company's after-tax profit for the year is $100 million and the company has 500 million shares, then the company's after-tax profit per share is $0.1 (i.e., $100 million ÷ 500 million shares). Profit after tax per share highlights the amount of earnings spread over each share and is the basis for pricing on the stock market at the price-earnings ratio. If a company's total after-tax profit is large, but earnings per share is small, indicating that its operating performance is not ideal, the price per share is usually not high; on the contrary, a high amount of earnings per share indicates that the company's operating performance is good, and can often support a higher share price.
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