Question

Earnings available to common shareholders are divided by the average number of shares actually outstanding during the accounting period. Identify which of the reporting methods this statement describes:_______.

Answer 1

Answer: Earnings per share

Step-by-step explanation:

There are no options but this should be the correct answer.

Earnings per share are calculated by dividing the earnings available to shareholders which is usually the Net income by the average number of share outstanding during the accounting period.

Earnings per share therefore shows how profitable a company is and how profitable it is to invest in a company with higher EPS ratios being more desired than lower.