Risk drives return

Posts: 3

Re: EPS in action (简单介绍EPS)
Reply #13 - 04/07/07 at 02:01:48 Quote
Quote from uMonster on 04/03/07 at 08:03:53:
Ya, it is a quite interesting topic. and I want to know why someone says that EPS is a POOR INDICATOR OF ACTUAL CORPORATE VALUE? Roll Eyes


Saw somewhere. hope it useful[refer to Key mangement ratios]
1. Alternative accounting methods may be employed. Both required changes by FASB or IAS and voluntary changes can changes EPS. but do not affect economic value.
2. Risk is excluded. Both business risk and financial risk are not accounted for in annual reports.
3.Investment requirements are exclued. Changes in for example the working captial are not considered in Reported Earnings.
4.Dividend policy is not considered. For example dividend decreases will show increased EPS but are in fact value neutral.
5. The time value of money is ignored. No present value calculations in Reportd Earnings.
6. The increased role which intangible assets play in our economic system. that has moved from a n industrial economy towards a services and knowledge oriented economy.
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Posts: 2

Re: EPS in action (简单介绍EPS)
Reply #14 - 04/07/07 at 10:11:04 Quote
顶！ 顶！ 不过谁可以解释一下‘bot’贴的东东，有点深。 Shocked
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