"All of the following are correct about the 'earnings' that is managed by companies, except for:" Earnings includes total comprehensive income. Earnings is 'net profit after tax'. Earnings excludes 'other comprehensive income'. Earnings is used to compute the Earnings per share ratio.
Question
"All of the following are correct about the 'earnings' that is managed by companies, except for:" Earnings includes total comprehensive income. Earnings is 'net profit after tax'. Earnings excludes 'other comprehensive income'. Earnings is used to compute the Earnings per share ratio.
Solution
The statement that is not correct about the 'earnings' that is managed by companies is: "Earnings includes total comprehensive income."
Here's why:
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Earnings is 'net profit after tax': This is correct. Earnings, also known as net income, is calculated by subtracting total expenses from total revenues. This includes taxes.
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Earnings is used to compute the Earnings per share ratio: This is also correct. Earnings per share (EPS) is a financial ratio that divides net income by the number of outstanding shares of common stock.
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Earnings excludes 'other comprehensive income': This is correct. Other comprehensive
Similar Questions
Fill in the Blank QuestionFill in the blank question.Earnings per share is equal to income divided by the number of outstanding of a firm's common stock.
earnings per share is the ratio of net income after taxes to the number of common stock shares outstanding.
Accumulated earnings from the firm's profitable operations that are kept in the business and not paid out to stockholders in distributions of company profits are called earnings.
earnings per share measures profit per share of outstanding common stock, but also takes into consideration stock options, warrants, preferred stock, and convertible debt securities.
The `earnings` portion is the ____________ reported by the company per share.a.Net income after taxb.Dividend yieldc.Reported gains in the balance sheetd.Outstanding share
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