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Author Topic: Earnings forecasts  (Read 5088 times)

michaessers

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Earnings forecasts
« on: August 05, 2014, 11:04:42 am »
Hi

Im trying to understand why analysts focus so much attention to companies earnings. Why is EPS such a popular measure of financial performance? Surely there are many limitations inherent in it?
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Neil

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Re: Earnings forecasts
« Reply #1 on: August 05, 2014, 02:06:41 pm »
Because a firms goal is to make a profit, and EPS represents a firms profit or loss. A business is only worth its net asset value less future depreciation, plus the sum of its future earnings discounted to the present, over a certain period.
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