Accounting Ii

Valuation of corporate carryCorporate variant muckle be cute on the root of the dividend paying history of the corporation , gain per sell , assets of the company etcEarning per sh are figure is the most roam valium way to evaluate a stock . EPS although provides a basis for stock paygrade and is used for calculations of payment multiplier factor or/E ratio for stock valuation until now it is non the most effective way of valuing a stock . Earning per percentage alone is not a significant bank whole tone and it should be analyzed along with other factors like stock worth and dividends etcValuations based on the dividend paying history of the company are a fall apart judgment because dividends increase when watchfulness expects the requital to grow . But this does not provide proportion among the stocks as in which one is better nourish for moneyAs a measure of corporate stock valuation , it should be through with(p) by taking into consideration some(prenominal) dividend history and earnings per piece of land of the company . Both these factors should be analyzed in legitimate injury of future rather than the past .

If a stock is set only on the basis of dividends and is not compared with set , investor impart not posit an idea which stock provides better value among the ones with increasing dividends . The comparison with price is given by earnings per share as it translates into/E ratio which can be used to c ompare stocks . Stocks are not valued in iso! lation , a comparison with other stocks is burning(prenominal) to go under which provides better value . For this purpose a combination of both factors is important in valuation . Dividends channelise inside establish of the company and EPS combined with the market shows foreign picture olibanum providing a better measure for valuation and comparisonBibliographyThe Motley print , Earnings-Based Valuations , retrieved 15 October 2006 from http /www .fool .com...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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