Answered: TRUE OR FALSE Basic earnings per share…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

TRUE OR FALSE

Basic earnings per share is required to be reported for all publicly-traded corporations.

Expert Solution

Step 1

The answer is True. All publicly traded corporations are required to report basic earning per share of the company. Every company is required to publish basic EPS in its quarterly, half yearly and annual statements.

Basic Earning per share is calculated as the company's net income available to ordinary equity shareholders divided by the number of outstanding shares in the market.

If the company reported net income of $ 50,000 and number of outstanding shares in the market is 10000 then the

Basic EPS = Net Income to ordinary shareholders $\div$ number of outstanding shares in the market = 50,000 $\div$ 10000 = $ 5 per share.

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