BUSINESS ADMINISTRATION
ACCOUNTING FOR MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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No. of Equity Shares
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Opening Stock
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Sales
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Marginal Cost
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Detailed explanation-1: -Basic earnings per share should be calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
Detailed explanation-2: -Earnings available for common stockholders equals net income minus preferred dividends. Net income, or profit, equals total revenue minus total expenses. Revenue is the money you earn selling products and services. Expenses are the costs you incur in the same period, such as rent, payroll, interest and income taxes.
Detailed explanation-3: -Earnings available for common stockholders is net after-tax profit, minus any preferred dividends. Theoretically, the remainder represents the amount of earnings that a business could pay out to the owners of its common stock.
Detailed explanation-4: -You simply divide last year’s net income by the total number of issued shares to calculate the earnings per share ratio.