Sample Thesis Paper
The shareholders invest in a company to make profit from their funds invested in company’s stock. This is either as a price increase of the company’s stock or dividend paid by the company. However, companies have two options either to retain their income or distribute it to shareholders. Earnings per Share ratio simply indicate the company’s net earnings per share. It is calculated by dividing the net income of the business by the total number of shares outstanding (Loth 2009). However, it has weakness as criticized by Carlberg (2001) as he comments;
‘EPS is usually a poor candidate for vertical analysis because different companies always have different numbers of shares of stock outstanding. It may be a good candidate for horizontal analysis, if you have access both to information about the company’s income and shares outstanding’ (p. 158).