How To Use Earnings Per Share (EPS) To Make Profitable Investment Decisions.
Before you invest in those stocks, it is important to know if your investment is going to yield the highest profitable returns possible in a chosen sector. The most reliable tool to test for optimal profitability is the Earnings Per Share (EPS) shareholder ratio EPS is the most frequently used of all accounting ratios. It ia believed to give the best picture of a company's performance. To calculate EPS, divide a company's net profit or loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. The net profit or loss attributable to ordinary shareholders is earnings after tax, minority interest and extraordinary items available for equity shareholders. Every information needed for the calculation of EPS is available in a company's financial statements. But the EPS shouldn't be used in isolation to make an investment decision. Other factors must be considered before a final decision is reached. Don't...