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Cn any one explain what is ebit & eps analysis?

CS 1533 views 11 replies

cn any one explain what is EBIT – EPS analysis?

Replies (11)

Is it EBIT-EPS or EBIT/EPS??

EBIT-EPS

Please refer the enclosed notes....

thanx rajan............. but as a term in layman language what does it mean why it is used i wanna know its purpose 

The EBIT-EPS analysis, as a method to study the effect of leverage, essentially involves the comparison of alternative methods of financing under various assumptions of EBIT.

 

EBIT-EPS Break-Even Analysis -- Analysis of the effect of financing alternatives on earnings per share.  The break-even point is the EBIT level where EPS is the same for two (or more) alternatives.

Refer below link for some clarity

https://campus.murraystate.edu/academic/faculty/lguin/FIN330/EBIT_EPS.htm

If a company need to raise additional money by issuing either debt,preffered stock & common stock.Which alternative will allow company to have highest EPS? This is called EBIT-EPS analysis

okkkkk.... now i got it is just a technique to determine which option is better to choose for a company in order to raise its capital which will also increase its earning per share. isn't it????

Yes exactly and also which option is less risk with higher EPS.

thanx a ton.....will disturb u again shortly with more quries .................:)


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