What Is the Purpose of Computing the Earnings Per Share

question 194

Short Answer

What is the purpose of computing the earnings per share ratio?
To determine which firm gets the most out of its resources
To determine the net profit margin
To measure a firm's ability to meet its current liabilities
To attract investors
To measure the net income earned by a business for each dollar invested

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Definitions:

Formal

Pertaining to conventions, rules, or established procedures often recognized by official institutions or customs.

Strategic Ambiguity

The deliberate use of vague or indistinct language to achieve a specific objective or to adapt to multiple situations.

Multiple Goals

The presence of more than one objective that an individual or organization aims to achieve.

Tenuous

Describes something that is very weak, slight, or uncertain; having little substance or significance.