Retained Earnings Per Share
factor.formula
Retained earnings per share =
The formula calculates retained earnings per share by dividing the ending retained earnings by the ending total common stock.
- :
Refers to the total amount of retained earnings accumulated by a company at the end of a specific reporting period (such as the end of a quarter or year). Retained earnings are the profits that a company retains for future development after deducting all costs, expenses, taxes and distributed dividends.
- :
Refers to the total number of common shares issued by a company at the end of a specific reporting period. This number is usually found in the company's financial statements. Common stock capital is the main manifestation of shareholders' ownership of the company. Compared with preferred stocks, common stockholders have the final right of recourse in terms of company profit distribution and asset liquidation.
factor.explanation
Retained earnings per share (REPS) provides a perspective to measure a company's long-term accumulated profitability and shareholder equity value. This indicator can be used in conjunction with other per-share indicators (such as earnings per share, EPS, and net assets per share, BPS) to more comprehensively assess a company's financial condition and investment value. In addition, the growth trend of REPS is also an indicator worth paying attention to, which reflects the long-term accumulation and growth of a company's profitability. Investors can combine the industry average and historical data to determine whether the company's retained earnings are sufficient to support its future development plans. It should be noted that an excessively high REPS may also indicate that the company has not fully utilized its profits for reinvestment or shareholder returns. Therefore, a reasonable REPS level depends on the company's development stage and industry characteristics.