Earnings per share

Growth in earnings per share is used widely by analysts as a measure of a company s success. Adjustments must be made where issues of shares have... 

Net income (4) Basis for earnings per share calculation/net operating profit after taxes... 

P/E values are used to judge whether a stock is a good value relative to its earnings stream. Another way to diink of die P/E is to take its reciprocal and think of that number as an interest rate. This interest rate interpretation would be completely valid if the entire amount of die company earnings per share were paid out as a cash dividend. For example, a P/E of 20 can be thought of as comparable to an interest rate of 1/20 = 5%. 

Limiting the financial metrics is a key ingredient in energizing a company for change. Corporations tend to focus on net earnings (per share), EBIT, sales growth, and market share. Financial sponsors, on the other hand, use a value-... 

A key figure in valuing a company is the ratio of its current share price (as an indicator of what the world thinks of it) to the total net profit (earnings) divided by the number of shares (earnings per share). This is called the PjE ratio (price/earnings), and is a major tool in comparing the performance of a company within its class of similar companies. 

The fact that such a scandal now seemed to have in fact happened at Merck didn t change his opinion of the company s systems and controls, Clarke insisted, as the headlines swirled. Merck had not only been using this accounting method, but disclosing it. There was no impact on earnings per share, he pointed out. I don t think it would ever have been questioned, he added, if you had not been in a time when any mention of the word accounting was in a sentence that included the word scandal. ... 

The sum of items 1 through 5 is sometimes listed as earnings before interest and taxes (EBIT). The sum of items 1 through 7 is listed as income before taxes or taxable income, and is usually positive. The net income is the sum of items 1 through 8, i.e., income before taxes minus taxes paid. Net income is also usually expressed as earnings per share of common stock. 

Simple measures of the effectiveness of management are the return on equity and earnings per share. Return on equity (ROE) is defined as... 

Company Income as percentage of sales Earnings per share... 

In the words of a senior executive who advocated the purchase, Marion Laboratories had the premier sales organization in the United States. But, he added, It had no research worth the name, and fairly mediocre manufacturing facilities. Reality struck quickly. By 1993, earnings per share dropped sharply. Senior managers had become fully aware of the basic weaknesses due to the expiration of patents in its major businesses. Brandt, Growth Company, pp. 555-557, 560-564, provides an excellent review of the weaknesses of Marion Merrell Dow that led to its sale to Hoechst. See also Derdak, ed.. International Directory, vol. 9 (1994), pp. 32S-329 Hoover s Handbook (1996), p. 313. 

The company s financial structure (total sales, earnings per share, net income, stock price, assets, debts, etc.)... 

What is the past record Look at its past 10 years record of sales, earnings per share, and stock price. What patterns are present rising or falling What are the causes behind these changes, and how does this company compare with other chemical companies manufacturing similar products, with industrial companies in general, with the GDP Apply financial analysis. 

Frequently, the earnings per share is of interest to owners of common... 

Table 5.10 Top 50 Companies in the United States Ranked by Revenues Dollar Amounts x 10, Except Earnings per Share... 

A great deal of Air Products s growth is attributed to the aggressive expansion of acquired businesses. Consult a source such as Moody s or Valueline and determine what effect, if any, mergers had on the company s earnings per share and net income. Pick any recent merger for this question. 

Working capital, which allows a company to carry on day-to-day operations, is determined by subtracting current liabilities from current assets. (See also item 20 in Section 16.3.4.2.) After-tax cashflow is defined as the net profit after taxes plus depreciation. It is essential to have adequate cash flow to operate the company. Earnings per share interests common stockholders and stockbrokers. It is found by dividing the net profit after taxes by the number of shares of common stock. 

During the war years earnings per share had declined from the prewar level. Once the war was over, technical efforts were directed toward reversing this trend. Two important fibers were introduced, Orion acryhc (1948) and Dacron polyester (1950). In 1949 Du Pont became the first chemical company with sales greater than 1,000,000,000. 

Net Operating Profit After Tax (NOPAT), Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), and Earnings per Share (EPS), just to give some examples. 

---