Which of the following helps analyzing return to equity shareholders?

Return on Assets

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Earnings per Share

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Net Profit Ratio

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Return on Investment

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is B Earnings per Share
Earnings per share is calculated by dividing company's net income by total number of outstanding shares. The higher the earnings per share the better is the profitability .

Suggest Corrections

Similar questions

Is return on investment an important determinant of a company's ability of trading on equity? State true or false.

Q. Who formulated the following model for estimating the market price of equity share?

P = \frac{D + \frac{R_{a}}{R_{c}} (E - D)}{R_{c}}

Where,

P =

Market price of equity share

D = D P S

E = E P S

E - D =

Retained earning per share

R_{a} =

Internal rate of return on investment

R_{c} =

Cost of capital.

Net Profit before interest and tax Rs. 80,000; Equity share capital of Rs. 1,20,000; 10% Preference Share Capital of Rs. 50,000; 12% Debentures Rs. 1,00,000; Reserves and Surplus Rs. 1,30,000; Tax rate 50%; Calculate Return on Investment.

Q. The profit figure is to be taken into account for calculating return on shareholders equity is ____________.

Q. State with reason whether the following transactions will increase, decrease or not change the 'Return on Investment' Ratio:
(i) Purchase of machinery worth ₹10,00,000 by issue of equity shares.
(ii) Charging depreciation of ₹25,000 on machinery.
(iii) Redemption of debentures by cheque ₹2,00,000.
(iv) Conversion of 9% Debentures of ₹1,00,000 into equity shares.

Join BYJU'S Learning Program

Which of the following helps analyzing return to equity shareholders?

The correct option is B Earnings per ShareEarnings per share is calculated by dividing company's net income by total number of outstanding shares. The higher the earnings per share the better is the profitability .

The correct option is B Earnings per Share
Earnings per share is calculated by dividing company's net income by total number of outstanding shares. The higher the earnings per share the better is the profitability .