FINANCIAL ACCT(HARDBK)+MYACCTGLAB>ICB<
FINANCIAL ACCT(HARDBK)+MYACCTGLAB>ICB<
W20 Edition
ISBN: 9780136615583
Author: REIMERS
Publisher: PEARSON C
bartleby

Videos

Textbook Question
Chapter 11, Problem 1YT

Describe why earnings is such an important number.

Expert Solution & Answer
Check Mark
To determine

Explain the reason for considering earnings as important.

Explanation of Solution

The earnings set as a standard for the investors to evaluate the performance of the company and make the decisions related to investment. The value of the shares increases if company meets the expected earnings and falls if the earnings is reduced. Thus, earnings play an important role in determining the value of the company.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Does the income statement 'tie in' to the balance sheet? If so does it increase or decrease retained earnings?
How can earnings management affect the quality of ­earnings?
How do I calculate the percentage of total revenue that end as net earnings
Knowledge Booster
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
  • College Accounting, Chapters 1-27
    Accounting
    ISBN:9781337794756
    Author:HEINTZ, James A.
    Publisher:Cengage Learning,
  • College Accounting, Chapters 1-27
    Accounting
    ISBN:9781337794756
    Author:HEINTZ, James A.
    Publisher:Cengage Learning,
    How To Analyze an Income Statement; Author: Daniel Pronk;https://www.youtube.com/watch?v=uVHGgSXtQmE;License: Standard Youtube License