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I am working on a common income statement based on WorldCom, do I need to do...

I am working on a common income statement based on WorldCom, do I need to do the percent of revenue for the earnings per share or just use those on any ratios I have to do like earnings per share, book value per share and price earnings, also what is the formula for doing those ratios? I do not know how to calculate those ratios

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Answer #1

Earnings Per Share is Profit share allocated to the each share of the Common Stock . In order to calculate the earnings Per Share below is formula

Earnings Per share = (Net Income- Preferred Dividends)/ Weighted Average Common Stocks

Net Income and Preferred Dividends is available in the income statement and weighted Average common stocks in the Balance Sheet.

Book Value Per Share= It is the book value of the share which is calculated by using Common Shareholders equity of the company.

Book Value Per Share = (Total Shareholder Equity- Preferred Equity)/ Total Outstanding Shares.

All the Above three items is available in Balance sheet.

The price-earnings ratio is the ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS).

Price Earnings Ratio= Market Value Per Share/ Earnings Per Share

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