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LESSON 15-2

LESSON 15-2. Analyzing an Income Statement. TERMS REVIEW. page 460. financial ratio – comparison between two items of financial information earnings per share – amount of net income after federal income tax belonging to a single share of stock

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LESSON 15-2

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  1. LESSON 15-2 Analyzing an Income Statement

  2. TERMS REVIEW page 460 • financial ratio – comparison between two items of financial information • earnings per share – amount of net income after federal income tax belonging to a single share of stock Net Income after Fed. Income tax/Number of Shares Outs. 80,313.95 / 2500 = 32.13 Earnings per share • price-earning ratio – Relationship between market value per share and earnings per share of stock Market Price per share/Earnings per share 345/32.13 = 10.7 Price-Earnings Ratio LESSON 15-2

  3. ANALYZING AN INCOME STATEMENT SHOWING A NET LOSS page 457 LESSON 15-2

  4. Market Priceper Share Net Incomeafter FederalIncome Tax ÷ ÷ Earnings perShare Number of SharesOutstanding = = Price-EarningsRatio Earningsper Share FINANCIAL RATIOS page 459 Earnings per Share $80,313.95 ÷ 2,500 = $32.13 Price-Earnings Ratio $345.00 ÷ $32.13 = 10.7 LESSON 15-2

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