Earnings per share (EPS) a. Is useful in both comparing earnings performance across companies and in comparing earnings performance

Earnings per share (EPS)
a. Is useful in both comparing earnings performance across companies and in comparing earnings performance for the same company over time.
b. Is not useful in comparing earnings performance across companies or in comparing earnings performance for the same company over time.
c. Is useful in comparing earnings performance across companies.
d. Is useful in comparing earnings performance for the same company over time.

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  1. Answer:

    The correct answer is letter “D“: Is useful in comparing earnings performance for the same company over time.

    Explanation:

    Earnings Per Share or EPS is a measure of the income of one given company. EPS is determined by subtracting dividends from the company’s profit and dividing the amount by the number of outstanding shares. Higher EPS are convenient for institutions since it implies the revenue is being higher which is likely to attract more investors.

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