Asked by Autumn Gilbert on Apr 27, 2024
Verified
Earnings per share is an important disclosure because
A) it provides information relevant to the common stockholders
B) net income disclosed in the financial statements can fluctuate based upon management's intentions
C) it forces common and preferred stockholders to read the financial statements
D) it uses net income
Earnings Per Share
A key financial indicator calculated by dividing the net income by the number of outstanding shares of a company's stock.
Net Income
The total profit of a company after all expenses and taxes have been deducted from total revenues.
- Comprehend the methods of recognizing revenue and their implementation in particular situations.
Verified Answer
ML
Maria LozanoMay 03, 2024
Final Answer :
A
Explanation :
Earnings per share is important because it provides information relevant to the common stockholders, who are the primary investors in a company. It shows how much income is being generated per share of common stock, and provides insight into the company's profitability on a per-share basis.
Learning Objectives
- Comprehend the methods of recognizing revenue and their implementation in particular situations.