Question

. Describe one profitability ratio and its use.

. Describe one profitability ratio and its use.

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Answer #1

I am describing about Earnings Per Share(EPS)

This ratio measures profitability from the point of view of the ordinary shareholder. A high ratio represents better the company is. An investor thinks to invest in those company whose EPS is more than anothers in the market

Formula: Net Profit ÷ Total no of share outstanding

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