What Is the Purpose of Computing the Earnings Per Share

question 203

Multiple Choice

What is the purpose of computing the earnings per share ratio?

• A) To determine which firm gets the most out of its resources
• B) To determine the net profit margin
• C) To measure a firm's ability to meet its current liabilities
• D) To attract investors
• E) To measure the net income earned by a business for each dollar invested

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Definitions:

Cash Receipts Journal

A journal used to record all cash inflows or money received by the business.

Cash Received

The amount of money a business collects, normally in exchange for goods or services.

Customers Account

Refers to the individual accounts or ledgers maintained by a business to record transactions related to sales, returns, payments, and balances owing for each customer.

Cash Receipts Journal

A financial journal that tracks all cash inflows or money received by a business, including sales, loans, and investments.