DISCUSSION 1
You are a research analyst for a publicly traded company, and you’ve been assigned to give a presentation on how a company uses performance metrics in corporate valuation.
Respond to the following in a minimum of 175 words:
- Think about how you would present return on equity (ROE) and earnings per share (EPS) to a group of investors or senior management.
- Explain the use of ROE and EPS in evaluating the value of a company. Include how to calculate ROE and EPS.
- Why is understanding ROE and EPS important to a company’s value?
- Share an example of a company whose ROE and EPS you calculated. What do these results say about the company?
RESPOND TO THE FOLLOWING STUDENT POST
Demetric post
The return on equity (ROE) and earnings per share (EPS) are two metrics that are used to look a company’s performance. financial stability and possibility for future earnings. The return of equity looks at the company’s ability to generate revenue using the investors capital. The ROE lets you know economically managed. The return measures the return that the investors will receive on their investment. The return is profit from the previous twelve months. When a company has a high return of equity, this indicates a high value of the company. The return on equity is calculated by dividing the company’s income by the investor’s equity. Earnings per share (EPS) shows how profitable a company is. This metric measures earnings that attribute to common stock share and tracks the companies previous performance. EPS is calculated by dividing the net income by the total number of the company’s outstanding shares. Understanding of EPS and ROE is important because it tells you about the growing or declining trend of the company. IT also tells you about how much the company is able to exceed the cost of capital through its generation of income.
Kalindy post
Many companies use performance metrics in corporate valuation. ROE is known as return on equity and EPS is earnings per share. Return on equity shows how much “income to shareholders per dollar that they have invested” (Brealey, Myers, & Marcus, 2020). These value the “net income as a percentage of shareholders’ equity” (Brealey, Myers, & Marcus, 2020). While earnings per share show how money a company could earn for each share of stock (Fernando, 2022). You calculate earnings per share by dividing the net profit by the number of outstanding common shares. Return on equity is calculated by dividing the net income (a company’s profit) by equity. Understanding these calculations help determine a company’s value in different ways. They determine how profitable a company is and how well it may make those profits. The more profitable a company appears, the more likely investors will put more into the company. The company Walt Disney has the ROE of 6.26% and EPS of $1.06. These calculations show that company is.
DISCUSSION 2
Respond to the following in a minimum of 175 words:
- Discuss which of the three approaches to internal reward alignment your organization, or an organization you’re familiar with, uses to determine job valuation.
- Do you think that method is the most effective? How might the job valuation in this company differ if a different method was used?
