Comparing EPS across companies is not advised because:
A)the number of shares outstanding may vary.
B)EPS is not a meaningful measure.
C)Retained Earnings may vary.
D)the price per share may vary.

Question

Quizplus · Accepted Answer

The number of shares outstanding for one company can differ dramatically from the number outstanding for a different company,simply because one chooses to issue more shares of stock than the other.Also,as you have seen in earlier chapters,net income can be affected by differences in how two companies cost inventory,estimate bad debts,depreciate long-lived tangible assets,and estimate losses from contingent liabilities.

Comparing EPS Across Companies Is Not Advised Because