An EPS amount is always shown for:
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A. B. C. D.D
All of the responses are true.
The correct answer is D. All of these answers are correct.
Earnings per Share (EPS) is a financial metric that indicates the portion of a company's profit allocated to each outstanding share of common stock. EPS is commonly used by investors and analysts to assess a company's profitability and compare it with other companies in the same industry.
EPS can be calculated using different measures of income, depending on the purpose and context of the analysis. The options provided in the question correspond to different measures of income used in calculating EPS:
A. Income before extraordinary items and the cumulative effect of accounting changes: This measure of income excludes any extraordinary items and the cumulative effect of accounting changes. Extraordinary items are rare and significant events that are both unusual and infrequent, such as natural disasters or large litigation settlements. The cumulative effect of accounting changes refers to the impact of changes in accounting principles or methods applied retroactively to financial statements. By excluding these items, EPS is calculated based on the core operational performance of the company.
B. Income from continuous operations: This measure of income includes the results from the company's ongoing, normal operations and excludes any income or loss from discontinued operations, extraordinary items, and accounting changes. It focuses solely on the recurring income generated by the company's primary business activities.
C. Cumulative effect of accounting changes: This measure of income reflects the impact of accounting changes on the financial statements. It includes the cumulative effect of retrospective application of changes in accounting principles or methods. This item is typically reported separately in the financial statements to provide transparency and clarity regarding the impact of such changes.
Since EPS can be calculated using any of these measures, the correct answer is D. All of these answers are correct. It's important to note that the specific measure of income used in calculating EPS should be clearly disclosed in the financial statements or accompanying notes to ensure proper understanding and comparability.