In evaluating the quality of a company's earnings,which of the following factors is least important?
A)The accounting methods used by management
B)The trend of the company's earnings over a period of years
C)The dollar amount of earnings per share
D)The stability and sources of the company's earnings

Question

Quizplus · Accepted Answer

The dollar amount of earnings per share may not necessarily indicate the quality of a company's earnings. It is possible for a company to have high earnings per share due to factors such as share buybacks or a decrease in outstanding shares, without there being a sustainable increase in the company's earnings. Therefore, the dollar amount of earnings per share should not be the primary factor in evaluating the quality of a company's earnings.

In Evaluating the Quality of a Company's Earnings,which of the Following