Chapter 7
Corporations: The Financial Statements
368
a) EPS Ratio
2017
2016
EPS Ratio
b) Income per Share
2017
2016
Income from Continuing Operations per Share
Income from Discontinued Operations per Share
Net Income per Share
c) Dividend Payout Ratio
2017
2016
Dividend Payout Ratio
d) Price – Earnings Ratio
2017
2016
Price – Earnings Ratio
e) Book Value per Share
2017
2016
Book Value per Share
Analysis
Price-earnings ratio (or P/E ratio) is generally regarded by many investors as a reliable
indicator of a stock’s potential growth in the future. One of your clients just told you that
a stock he invested just had a significant growth in the P/E ratio, yet the price of that share
has not changed. How would you explain to him about why P/E ratio increases without an
increase in the share price?
