微观经济学dividends, retained earnings and income reporting参考.pptVIP

Earnings Per Share Weighted-Average Shares COMPANY INCOME STATEMENTS Include the same sections as in a proprietorship or a partnership except for the reporting of income taxes For tax purposes, companies are considered to be a separate legal entity As a result, income tax expense is reported in a separate section of the company income statement before profit PowerPoint presentation by Dr Anne Abraham, University of Western Sydney * LO4 COMPANY INCOME STATEMENTS continued Condensed income statement shows typical presentation PowerPoint presentation by Dr Anne Abraham, University of Western Sydney * Sales $800 000 Cost of sales 600 000 Gross profit 200 000 Other income 10 000 Expenses 54 000 Profit before income taxes 156 000 Income tax expense 46 800 Profit $109 200 LEADER LTD Income Statement for the year ended 30 June 2010 COMPANY INCOME STATEMENTS continued Income tax expense and related tax liability for income taxes payable are recorded as part of the adjusting process Adjusting entry as at 30 June 2010 PowerPoint presentation by Dr Anne Abraham, University of Western Sydney * Income Tax Expense 46 800 Income Taxes Payable 46 800 (To record income taxes for 2010) EARNINGS PER SHARE Earnings data are frequently reported in the financial press They are used by shareholders and investors to evaluate profitability Earnings per share (EPS) indicates the profit earned by each issued ordinary share Growth in a company’s EPS is of particular interest PowerPoint presentation by Dr Anne Abraham, University of Western Sydney * LO5 EARNINGS PER SHAREcontinued EPS formula: EPS is generally reported below profit on the income statement Investors often attempt to link EPS to market price per share PowerPoint presentation by Dr Anne Abraham, University of Western Sydney * = Earnings per share ÷ Profit minuspreference dividends Weighted average or