Which statement concerning earnings per share is incorrect?
A) It represents a conversion of the absolute dollar amount of profit to a per share basis.
B) Even if profits increase earnings per share could decrease if share capital increases at a greater rate than profits.
C) Earnings per share is regarded as one of the least important financial ratios.
D) In calculating earnings per ordinary share, preference dividends are deducted from profit.

Question

Quizplus · Accepted Answer

Earnings per share is considered an important financial ratio as it indicates the amount of profit available to each outstanding share of common stock.

Which Statement Concerning Earnings Per Share Is Incorrect