Income From Continuing Operations Earnings Per Share

Overview of basic earnings per share.

Income from continuing operations earnings per share. An entity is permitted to disclose amounts per share other than profit or loss from continuing operations discontinued operations and net profit or loss earnings per share. Income from continuing operations loss from discontinued operations and net income only. Companies that present an income statement that segregates income from continuing operations from other components of income must also subdivide per share data e g eps from continuing operations discontinued operations etc. We also have preferred stock dividends of 75 000 and our shares are outstanding at 1 million at the start of the year and another 1 million issued.

For example in october 2018 southwestern energy company swn earned 1 06 per share in diluted earnings from continuing operations with a share price of 5 56. Earnings per share information is provided for. Earnings per share from continuing operations. So here s a set of facts the company has a net income of 600 000 this year.

A business must consistently generate earnings from operations to succeed in the long term. A multistep income statement reports income from continuing operations separately from nonoperating income. Maytag s income statement includes income from continuing operations a loss from discontinued operations extraordinary items. Earnings per share or eps is a widely followed performance measure.

Guidance for calculating and presenting such amounts is included in ias 33 73 and 73a. Chapter 4 income statement income from continuing operations discontinued operation earnings per share accounting changes accounting changes fall into one of three categories o accounting principle o estimate change the year forward salvage value bad debt depreciation expense o reporting entity impacting income earning per share basic eps. I m going to demonstrate the primary earnings per share because that s the main one we see in our income statements. Continuing operations discontinued operations extraordinary items and net income.

Earnings per share eps is the monetary value of earnings per outstanding share of common stock for a company. When analyzing an income statement it s important to know the difference between basic earnings per share usually just referred to as eps and diluted earnings per share diluted eps.