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How is 7-day EPS calculated?
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Chad the Launderer RJ: Synreal CO: Synreal Post Rating: 0 + / - Total Posts: 148 Karma: 71 Joined: Feb 11, 2012 |
Posted on Apr 25, 2012 Just wondering.
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Matthew Suozzo RJ: Buckaroo Bonzai Post Rating: 0 + / - Total Posts: 40 Karma: 51 Joined: Apr 5, 2012 |
Posted on Apr 26, 2012 (Last edited on Apr 26, 2012) Just a guess but based on the name (earnings per share) I'll say profit after taxes for the previous 7-day period divided by the number of shares issued.Okay, it wasn't a guess. http://www.accountingformanagement.com/earnings_per_share_ratio.htm |
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David Archer RJ: BallC CO: BallC Post Rating: 0 + / - Total Posts: 142 Karma: 135 Joined: Apr 11, 2012 |
Posted on Apr 26, 2012 I think there might be a bug here because take JOI for example:http://www.ratjoy.com/eos/stock-view.php?ss=JOI 7-Day EPS: $0.03 There are 599M shares outstanding so I expect to see maybe $18M in earnings when I look at the balance sheet. What I actually see is: Net Earnings $325 M $1.49 G $1.13 G $436 M $4.69 G $720 M $-2.81 G Maybe Ratan can enlighten us on this? |
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Matthew Suozzo RJ: Buckaroo Bonzai Post Rating: 0 + / - Total Posts: 40 Karma: 51 Joined: Apr 5, 2012 |
Posted on Apr 26, 2012 Mr. Archer is correct. I too am now confused as to how EPS is calculated. I'd love to be enlightened.
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Scott (Admin) RJ: Ratan Joyce CO: Ratan Joyce Post Rating: 0 + / - Total Posts: 1175 Karma: 5083 Joined: Jan 13, 2012 |
Posted on Apr 26, 2012 Oh, it's simple.(networth now - networth 7 days ago) / shares Let me know if this isn't correct. |
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Aaron Barr RJ: Aaron CO: Aaron Post Rating: 0 + / - Total Posts: 81 Karma: 74 Joined: Apr 13, 2012 |
Posted on Apr 26, 2012 The above is correct, it is actually: Net Income / Shares. However the way expenses for real companies are calculated is somewhat different than the simplistic methods here. Things like land purchases and equipment purchases for instance are not expensed all at once, but rather over a generally lengthy period of time during which the asset is "used" to produce income. This is why in game you see many growing companies with negative Net Income, then if there is one day with no large factory expansions or raw material purchases their income skyrockets. Depreciation and other accounting principles allocate these expenses more realistically so that real stocks show earnings per share values that make logical sense over long periods of time.p.s. don't get an accounting degree, its horrendously boring. |
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Chad the Launderer RJ: Synreal CO: Synreal Post Rating: 0 + / - Total Posts: 148 Karma: 71 Joined: Feb 11, 2012 |
Posted on Apr 26, 2012 Ratan, I think the system you have punishes people expanding as fast as possible. I have spent billions on research, factories and stores and that counts against my revenue and NW. I would have a much higher EPS (and share price) if I just sat on my hands and did nothing. My stores would make their 3 billion a day and my EPS would skyrocket. Instead, I pay dividends and constantly expand and my companies appears to be crap on paper.
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Aaron Barr RJ: Aaron CO: Aaron Post Rating: 0 + / - Total Posts: 81 Karma: 74 Joined: Apr 13, 2012 |
Posted on Apr 27, 2012 Right, the problem is you need an accurate EPS system in order to calculate (really have buyers of stock calculate their) P/E ratio. (stock)Price / EPS. The current stock market system has no basis in reality, and that is why there are all these problems. Stock price has no formula. You cannot tie price to networth, earnings, whatever. Stock is the same as any B2B commodity, it is worth what someone will pay, no more. And in addition to the fact that stock price is for some reason formula generated, there are very poor reports available to screen potential stock purchases. EPS is nonsense, and thus P/E is nonsense. Its ripe for scam artists... well that already happened... |
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Scott (Admin) RJ: Ratan Joyce CO: Ratan Joyce Post Rating: 0 + / - Total Posts: 1175 Karma: 5083 Joined: Jan 13, 2012 |
Posted on Apr 27, 2012 I admit I'm not smart enough to make sense of them all, so I'll just leave them as nonsense and call it a closed issue.
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