s ? Earnings per share – Interpreted in terms of number of outstanding shares – May be paid out in dividends or retained by company for subsequent reinvestment ? Statement of retained earnings – Indicates disposition of earnings 2-8 Statement of Retained Earnings 2-9 Price-Earnings (P/E) Ratio ? Multiplier applied to earnings per share to determine current value mon stock ? Some factors that influence P/E: – Earnings and sales growth of the firm – Risk (volatility in performance) – Debt-equity structure of the firm – Dividend payment policy – Quality of management 2- 10 Price-Earnings (P/E) Ratio (cont ’d) ? parison of the relative market value of panies based on $1 of earnings per share – Indicates expectations about the future of a company ? Price-earnings ratios can be confusing
全文预览