BUS101: Introduction to Business /Unit 4: Accounting, Finance, and Banking /4.3: Components of a Balance Sheet

bus101

#1

Can anybody help me, to understand more better, the correct meaning of the following passage means?
A company has many owners (shareholders) so the net income is ―shared‖ by all the shareholders. The number of shareholders figures into the equation. Profit shared by 1 million shareholders is a lot less than profit shared by 1000 shareholders. For investors to have a clearer idea of what profit they are personally getting, net income is converted to earnings per share (EPS). EPS basically gives the profit that the company generates on every share. There are two different kinds of earnings per share—diluted For the purposes of this class, basic earnings per share will be used


#2

Welcome @Yahya_bulle_Mohamed, I’m also a student of saylor like you and prior to your post seeking clarity on the worrying sentence, I am of the opinion that you should put yourself in the shoes of an Investor(shareholder) deciding which company shares to buy and how to calculate how much you will collect in case the company bull (make profit) on your shares therefore, suggesting available formula/tools to use to determine that.

in the case where a company have 5000 owners, if profit of #10,000 to be share among them it might result to individual getting #0.05kobo each compare to a company with 400 owners is so sure that each person might get #5 (exemplify )


#3

Welcome femjay101, As per your explanation, you said that shares can be calculated using the following formula /tool.
If the Company profit Is divided by the number of shareholders = The share Every individual shareholder will receive.