Earnings per Share EPS

EPS = (Net income - Preferred stock dividends declared)/ Common shares outstanding 

Earnings per share (EPS) is a widely used metric found on all the financial websites and touted all over the financial news outlets. Executives are held accountable for EPS performance. After all, stockholders want a return for their money. Here, it is calculated that PepsiCo earned 4.37 for each share. 

Assuming the market price for PepsiCo common stock is 85.00, the price-to-earnings (P/E) ratio is given below  

Price/Cash flow = Price per share/Operating cash flow per share First, it is critical to calculate operating cashflow per share. 

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

Economic cycle. The business cycle of the industry and its correlation with the overall business cycle are key indicators. That is, how closely does the industry follow the rate of growth of its country s GNP Certain industries such as the electricity and food retail sectors are more resistant to recession than others. Other sectors are closely tied to changes in population and birth patterns, such as residential homes, while the financial services industry is influenced by the overall health of the economy as well as by the level of interest rates. As well as the correlation with macro-factors, credit analysts review traditional financial indicators in context, for example, the issuing company s earnings per share (EPS) against the growth rate of its industry. 

With the revised DuPont model, notice that ROA is 2.03% and ROE is 4.65%, both of which are improvements over the current distribution network. Furthermore, EBIT and net profit margin both improve (Table 8.10). While fixed asset turnover declined slightly, the overall improvements outweigh any slight decline in this ratio. Moreover, since earnings per share (EPS) is important to Wall Street and executives alike, seeing that EPS improves since net profit increased to 8.33M and provided the number of shares has not increased. However, if the company increased the number of shares to raise capital for this project instead of using their own cash, then EPS may decline. 

Just what is a metric Simply stated, a metric is a number for measuring and reporting a key performance indicator of the business, the department, the workgroup, the product line, or the individual. For example, measuring and reporting EPS (earnings per share), employee turnover, percentage of units rejected by quality assurance, customer order fill-rates, and purchase orders processed per day would all qualify as metrics. 

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