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growth and earnings per share - Essay Example
Every company wants to generate capital to increase their business operations and expand. Publicly traded companies are those companies that float their stocks in the market to generate capital. Investors buy the stocks of the companies and they become stakeholders…
This reporting effects business operations in a positive manner by changing their course according to the report. Income growth helps organizations realize their profitability and income generation, according to this the stakeholders are given their share of profit in the form of more stocks or cash. This effects the business operations in a positive manner as they are pointing towards a positive direction. The earning per share helps the company decide the price of their stock, as the company's earning per share increases it becomes more profitable. EPS also helps tell the stakeholders the position of the company in the market and the risk associated with it. This effects the business operations of the company and they try to organize their operations according to the plans and strategy that are being implemented by the company. All these three revenue growth, income growth and earning per share are the fundamentals of the business and their overall impact on the business operations is to aware the management of the necessary changes that are required.
Net profit and cash flow are two separate things that help in analyzing the business progress and where a company is heading to. These two also determine whether the company is a success or a failure. The two components help the company in organizing itself and predicting the future.
Net profit is basically all the revenue minus cost of goods sold which equals to gross pr ...