That’s exactly what happens with publicly traded companies four times a year—it’s called an earnings report. A company’s earnings report to put it simply shows how much money the company made during a specific reporting period. The net income, also known as the profits of a company, is what is left after paying taxes and subtracting expenses from its income. Net Income- taxes-expenses= $$$ profits(earnings) While reading the earnings report there are important questions to keep in mind: • How did this quarter’s performance for UPS compare to the previous quarter, or to the same quarter in previous years? • Have revenues improved or taken a hit? • Is the company reinvesting into its business to create opportunities for long-term growth? …show more content…
EPS is how much net income (remember that net income is what is left after subtracting all the costs) the company has divided by the number of shares in the company. EPS= net income / # of shares of stock issued Earnings per share: this calculation tells you how much money shareholders would receive if the company decided to distribute all of the profits for the period. Why is EPS considered so important? EPS is a measurement of a company’s profit. It tells you how much net income a business earned for each stock share you own. UPS mentions Diluted Earnings per Share in our earnings statement. That is another version of the EPS. It takes the EPS figure one step further it estimates how many shares could technically exist. The number of stock issued is adjusted to include shares that might or will be issued in the future such as all stock options, warrants, and preferred stock and/or convertible bonds. It is a classic, conservative "what-if" calculation. If a company has a lot of future stock to issue, the "real" EPS would be lower than the basic EPS figure would show. Earnings tends to be a big factor in determining stock