Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

14. Financial Statement Analysis

Ratios: Earnings Per Share (EPS)

Financial Accounting

14. Financial Statement Analysis

Ratios: Earnings Per Share (EPS)

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Multiple Choice

Which two measures of Earnings Per Share (EPS) are required to be reported by all public companies according to U.S. GAAP?

Basic EPS and Diluted EPS

Cash EPS and Accrual EPS

Operating EPS and Comprehensive EPS

Gross EPS and Net EPS

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Verified step by step guidance

Understand the concept of Earnings Per Share (EPS): EPS is a financial metric used to measure the profitability of a company on a per-share basis. It is calculated by dividing the net income available to common shareholders by the weighted average number of common shares outstanding.

Learn the distinction between Basic EPS and Diluted EPS: Basic EPS is calculated using the actual number of shares outstanding, while Diluted EPS accounts for the potential dilution from convertible securities, options, or warrants.

Review U.S. GAAP requirements: According to U.S. GAAP, public companies are required to report both Basic EPS and Diluted EPS in their financial statements to provide a clear picture of earnings performance under different scenarios.

Understand why other EPS measures are not required: Measures like Cash EPS, Accrual EPS, Operating EPS, Comprehensive EPS, Gross EPS, and Net EPS are not mandated by U.S. GAAP because they do not provide the standardized comparability that Basic and Diluted EPS offer.

Conclude that the correct answer is Basic EPS and Diluted EPS, as these are the two measures explicitly required by U.S. GAAP for all public companies.