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

Question

Quizplus · Accepted Answer

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.

Earnings Per Share Is an Important Disclosure Because