Glossary of most frequent business formation terms
A B C D E F G H I J L M N O P Q R S T U V W
-E-
Earnings Per Share
(EPS)
Equity
Equity Financing
-E-
Earnings Per Share (EPS)
The amount of
net income attributed to each share of stock; it is determined by dividing net
income by the number of outstanding shares in a given period. In calculating EPS, the
company often uses a weighted average of shares outstanding over the reporting
term. The one-year (historical) EPS growth rate is calculated as the percentage
change in earnings per share. The prospective EPS growth rate is calculated as
the percentage change in this year's earnings and the consensus forecast
earnings for next year.
Equity
An accounting
term used to describe the ownership interest in a
corporation in the form of common stock, preferred stock or net investment of owners or stockholders in a business. Under the
accounting equation, equity also represents the result of assets less
liabilities.
A method of
raising capital in which a corporation sells shares of stock. Investors provide
funds for capital or operating expenses in exchange for capital stock, stock
purchase warrants and options in the business financed, without any guaranteed
return, but with the opportunity to share in the company's profits.
