Practice Quiz

Case Interview Prep

Category - Accounting

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Earnings per share is always shown on the income statement, except __________
  1. when the company is publicly traded.
  2. when the company issues stock.
  3. when the shareholders vote to have it not shown.
  4. when the accountant elects not to do so.
  5. when the company is privately owned.
Explanation
Answer - E - When a company is privately owned, there is no publicly traded stock, thus there will not be an earnings per share section on the income statement.

Key Takeaway: Earning per share is required on income statements for publicly traded corporations, as it is one of the best indicators of the company’s profitability.
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