Do Not Pay for High Speed Local Internet Speeds You Will Never Use

I have been watching all the commercial on TV for fast Internet service. All of the companies have a hook. I like the one that shows a family in a nice new modern house with all white furniture and carpeting. They are sitting around in their brand name clothes using the latest electronics watching videos and playing games. The ad implies how happy they are to have their new super fast Internet service. Well, my wife and kids along with me have a local Internet service that is a lot cheaper and just as effective.

We do not have white furniture and carpeting, and we buy a lot of our clothes from department stores. However, we do need fast Internet service. The kids are really into photography, videography and other things that take up a lot of bandwidth. I access and download large data files from work when I am telecommuting. None of us has any problems with our local Internet service speeds. Continue reading “Do Not Pay for High Speed Local Internet Speeds You Will Never Use”

Eliminate The Focus On Gross Income, Simple Business Strategies to Increase Net Income

Have you ever been to an awards ceremony for a company? Ceremonies where they share the results of different sales team members and hand out glass and plastic trophies for sales achievement? These ceremonies are generally thought of as morale boosters. They reward people for the hard work over the last quarter or year. After all it’s nice to be appreciated and receive public recognition. Even if it’s just a certificate in a frame, it feels good, right?

It’s nice when the president of your company recognizes your achievements. Sometimes you might have wondered if they even knew you existed! As you walk off the stage, what are you thinking? Are you really satisfied with that plastic trophy? Does it help you pay your bills?

Not that there is anything wrong with trophies, but they won’t help you go on vacation. That trophy won’t put your kids through college. Most of those trophies and awards are based off of GROSS income. How much of that income did you take home? What was your NET income?

While most companies focus on gross income, it’s your NET income that dictates your lifestyle. It’s your net income that will allow you to achieve your true goals. Instead of setting your goals at the gross income level, consider a focus on your net income.

Consider a strategy that forces you to focus on net income. To increase the money that ends in your checking account, consider the following two rules to live by:

7% Rule – The 7% rule is your marketing budget. This should be the cost of acquiring a single customer (not lead). Take your average sale and multiply it by 7% and you will have what you can invest in getting new customers. That means if on average a sale is worth $1,000 to you, you can invest $70 to get that customer. Don’t buy into the hype of “just 1 customer and you break even) as that will leave you broke.
Weekly Accounting – Regardless of your sales cycle make yourself do accounting weekly. This means that each week you need to pay all of your bills. If your sales cycle for your product or service normally takes 30 days, then you better amp up your sales to ensure you have something closing weekly. Increasing your net income means getting money coming into your small business weekly.

When your small business strategy has a focus on net income you will be able to get out of survival mode. Put the 7% rule and weekly accounting into action to start taking home more money today.

Discover Marketing Messages that will bring in more sales weekly. Free, 5 day, video powered course that you can start today. Marketing Strategy course give you free help to put into action.

Todd Bates is a national Marketing and Business coach. Through his programs, such as Todd Bates Systems, he shares innovative systems to help businesses owners and sales professionals dramatically grow their sales.

LinkedIn’s Top 7 Customer Focused Sharing Features

It sure seems to me like the world of marketing is changing so much faster in the last few years than in my previous thirty years, and I am pretty sure we have Al Gore to blame for that.

Pre-Internet, we as business owners and the marketing department of our organization (many times one and the same) were the only ones in our company who really had the ability to choose what message we wanted to share with our intended customer audience. These messages were shared through the small number of media outlets available–various types of print, radio, television and direct mail. The point is that we as the “smartest guys or gals” in the room decided what we said, how we said it, and where we were going to say it. If you haven’t noticed, things have changed a bit.

With the Internet and social media, we have so many voices (like everyone in the company) and choices (websites, blogs, Facebook and Twitter, to name a few, and, of course, my favorite–LinkedIn) to share our intended message. With so many people sharing in so many different ways, the message or content we share is more important than ever.

I really got a great primer on this concept as I was reading a book (which I highly recommend) called “Content Rules” by Ann Handley and C.C. Chapman. The concept they share early in the book is that all businesses are becoming publishers, not in the traditional sense of writing books but in a new way. They shared:

“When we say that businesses are becoming publishers, we’re referring not to the process of putting ink to paper or printing and binding books but to the notion that creating and delivering relevant, valuable information to people will drive new business to you.

“Figuring out what your prospective customers are interested in, creating stuff that meets those needs, and delivering it to them is what you need to do. You need to create stuff that will help your clients, you need to become a trusted resource your customers can look to, and you need to get buyers to take action when they are ready.”
Good “stuff,” huh?

This article is not going to help you decide what “stuff” you need to come up with to help your prospective customers but how you can use LinkedIn to deliver that message to the people you’re connected to directly as well as the groups you are in.

The Top Seven Ways to Share Your Best Customer-Focused Content Using LinkedIn

1. Use Box.net files to share the following:

Research-based white papers
“How to” articles
Customer case studies
Company newsletters
Event registration forms
eBooks
Best practices guides
Checklists
Polls
FAQs
Q&A

2. Use SlideShare or Google Presentation to share the following:

PowerPoint presentations
Videos that provide education, comparison and analysis of products and services

3. Use Blog Link or WordPress to share the following:

Your blog
Industry-related blogs
Blogs that provide useful comparisons and analysis of your products and services

4. Use the Websites section of your profile to point people to the following:

Parts of your own website where you provide helpful content
Industry-related resources and events
Podcasts that you or industry experts produce
Your Twitter or Flickr account that shares helpful content
The page on your website where people can sign up for your customer-focused newsletter
Registration for your upcoming webinar
Videos that provide educational information and/or analysis of your products and services

5. Direct people to any of the above-referenced resources by commenting on those specific items in your Summary section. This is your way to make sure they don’t miss these great resources that are placed in other parts of your profile.

6. Use the Status Box feature to share and link to helpful company and industry-related documents, websites, events, etc.

7. Join groups where your customers would be and share all of the above resources, being careful not to “sell.” This will help establish yourself as the industry expert in that group.

If you sit down and think of all the content you have already produced for other purposes and “repurpose” that into your LinkedIn strategy–and remember to engage all members on your team in a unified effort–you will be on your way to effectively sharing your voice with the marketplace.

Who says change can’t be for the good?

Wayne Breitbarth was once a skeptic and now is an outspoken proponent of LinkedIn, “LinkedIn Guru” Wayne Breitbarth is passionate about helping business professionals–from entry level to CEO–learn how to combine their previous experience and relationships with this innovative tool in order to more successfully brand and market themselves and their businesses.
Wayne’s diverse professional background uniquely positions him to assist not only individuals but corporate entities as well. With thirty years’ experience in the areas of operations, finance, management, consulting, and business ownership, he is able to “put it all together” for his corporate and individual clients.
In addition to his consulting work, Wayne is a dynamic speaker. His practical yet entertaining presentations have inspired audiences both locally, at many of Milwaukee’s most prominent companies and organizations, and nationally, at conventions, industry association events, and corporate training sessions.

Types of ASP Net Hosting

As internet is becoming more and more advanced every day and it is becoming accessible to more and more people, numbers of websites are increasing too. Every day we see a new website being launch. This has led to the increase in the number of web hosting providers. If you can understand the technology used in creating your website, you will be able to choose the best hosting for it. If a website is created with ASP .net framework, then choosing a good hosting is no different than others.

ASP is the next level of ASP (Active Server Pages) and both of them are the registered products of Microsoft. That’s why ASP .net works only on Windows based platforms and other Microsoft products. This framework gives the flexibility of acquiring massive amount of data with very less coding work. As this application works on .Net Framework, it can work in any .Net languages, like C# and VB .NET. The features and functions of this application framework have made it much easier for developers to create dynamic web pages and application with less amount of code and manage them with more efficiency. Websites created on this application framework can only be hosted on any three types of ASP .net hosting. These three types are the following.

Virtual Hosting: This type offers a dedicated server. However, in this type of hosting tangible equipments are shared with other users. This type is usually expensive, but in return it provides significant improvement in attributes and storage space. The average cost of this type is around $24 and provides storage capacity of around 60GB. In addition, it also provides SQL databases to some extent.

Shared Hosting: In this type, the web pages and applications of different clients of a web hosting provider are stored on the same server. It is the most affordable type of ASP .net hosting available in the market. This type costs around $5 per month. However, there are some restrictions in this hosting. This type provides around 1GB of storage space and a single database of SQL. This one is only ideal for individual webmasters or small firms.

Dedicated Hosting: This is a premium and most expensive type of hosting. In this, the server and the physical resources are only shared with the owner of the website. Therefore, this ASP .net hosting provides the best security of your web pages and applications. The average cost of this type is around $200 per month. But in return, it provides unlimited SQL database and around 500GB of storage space.

Loss Sharing in Theory and Practice

Over the past decade central banks and financial regulators have placed a heavy emphasis on ensuring that “National Payment Systems” are made as safe and secure as possible. We have seen the proliferation of Real Time Gross Settlement for high value payments and host of other arrangements for the “small ticket” systems. Generally these smaller systems settle on a multilateral net basis.

In the Bank for International Settlement’s “Core Principles for Systemically Important Payment Systems” there is the requirement that “A system in which multilateral netting takes place should, at a minimum, be capable of ensuring the timely completion of daily settlements in the event of an inability to settle by the participant with the largest single settlement obligation”. Additionally there is the requirement that such systems should seek to exceed the minimum Core Principle requirements.

One way of structuring a “fail safe” arrangement is the use of Loss Sharing Arrangements.

A Loss-Sharing Agreement is defined by the Bank of International Settlements as an agreement between participants in a transfer (i.e. payment) system or clearing house arrangement regarding the allocation of any loss arising should one or more participants fail to fulfill their obligation/s. The arrangement stipulates how the loss will be shared among the parties concerned in the event that the agreement is activated.

The term itself is really a misnomer as depending on its structure, it is more of an arrangement to redistribute obligations rather than an apportionment of losses. It is often also referred to as an Additional Settlement Obligation.

The basic concept behind the arrangement is to apportion any shortfall in settlement obligations either on the basis that this is covered by the defaulting party (the Defaulter Pays Model) or by the surviving members of the clearing arrangement (the Survivors Pay Model).

The principles behind the models are fairly simple and are set out below.

Defaulter Pays Model

oEach participant in the payment system or clearing arrangement puts up collateral to cover its debit (i.e. obligation) position if it fails to pay.

oThis can be for full or only partial settlement of the defaulter’s obligation. If it is only partial then an additional arrangement will be needed to cover the residual shortfall. This could be a “survivor’s pay” model or it could be covered by another party such as the central bank.

oFor this model to work effectively a limit or “cap” needs to be placed on the maximum net debit position of each participant in the payment system or clearing arrangement. In some systems, such as the cheque system setting this sort of limit is almost impossible to do.

Survivors Pay Model

oThe survivors (i.e. the participants who are left) agree to cover the shortfall of the defaulter on some pre-agreed basis (formulae). This could be based on (1) equal shares (mutualisation), (2) proportionate shares as on the day before the default, (3) proportionate shares based on actual exposure over a period of time (such as a month, or a year) or (4) some other agreed basis.

Inherent Dangers Of File Sharing Via The Internet.

Cyberspace has opened up a new frontier with exciting possibilities of “File Sharing.” We can explore any interest imaginable and research any topic of choice. We truly are global in reach with high speed internet usage at our disposal and a keyboard at our fingertips. We can share music, movies, games and even personal photographs.

However, with this global reach and easy to explore medium, comes the many dangers of the internet. Many of these dangers lurk behind the scenes and without our knowledge or consent, we are observed by Spyware.

Spyware infiltrate computer systems along with file sharing downloads. Personal information about us circulates the globe via the World Wide Web, and a web it truly is! This information finds its way to different entities or companies that are keen on knowing our surfing habits and the sites we visit. They also want to know about our file sharing interests. These observations by spyware intrudes on our privacy and security.

We can benefit greatly from “File Sharing” but must constantly be aware of the risks and safeguard ourselves from its many dangers. We must do all we can to protect our surfing habits from the prying eyes of internet snoops.

We can have our password stolen, identity stolen, our personal information abused as well as the loss of privacy we hold so dear.

We must find and remove “Spyware” to protect us from the many dangers of internet spying. One of the ways is to eliminate file sharing that enable spyware to piggyback with the “File Sharing Files” and take up residence in our computer.

Spyware and adware infiltrate and infest computers in very subtle ways when we download our favorite music or movie files, while P2P file sharing and chatting online. Spyware takes advantage of these downloads and creeps into computer systems along with shared files, so that they go unnoticed. We suspect problems when the computer slows down, there are unsolicited advertisements, or browser hijacking. The best way to find such infestations is to use a spyware scanner that will detect them and enable their removal from the system.

Firewall and Virus software do not offer protection against spyware, hence the importance of a software designed to scan and remove spyware. Get a Spyware Scanner that can detect all known spyware. You can get a free spyware scanner at http://www.DeleteSpyware.net

Julian Pereira has researched Spyware and its many implications over the years. He brings to light the many problems that spyware can cause to unsuspecting computer users besides the loss of privacy and the risk of identity theft. His site [http://www.DeleteSpyware.net] provides a free spyware scanner.

How to Profit by Removing Emotion From Your Share Trading Using MRT Management

Money Risk Trade Management & Trading Emotions

Trading emotions play a vital role in the success or failure of traders. Emotions affect our results and will prove the difference between successful and unsuccessful trading.

Are you one of the Average traders?

You have no trading plan or view.
You have no money management rules
You have no risk management rules or use a Stop Loss
Your prone to emotional swings (price goes up – happy, price goes down – you are sad)
You are nervous most of the time when in a trade
You quickly “give back” to the market your recent gains
You try to recoup losses immediately (revenge trading)
You are glued to the computer screen all day watching every price movement like a hawk
You never review your trade results to follow up on winners and losers.
Here is an easy one: You are losing MONEY!

I want to talk to you about what an average trader is. Unfortunately the majority of people fall into this ‘average trader’ category. Basically, they seem to think that trading is easy and for whatever reason they buy a stock, the stock’s immediately going to go in their favor. Heaven forbid they actually are successful, because now that reinforces that behavior going forward and it really sets up for a major disaster. If you’re an average trader, you have no trading plan or view of trading. It’s just that simple. Most people treat this as a hobby and they have no trading plan to speak of. They have absolutely no money risk management rules. If you’re sitting here reading this and you have no money risk management rules whatsoever, don’t worry. You’re part of the average trader that is out there.

Are you prone to emotional swings? So, price goes up, you’re immediately happy; if price goes down, you’re trying to jump out of a window. Those types of emotional swings are typical with average traders. Are you nervous most of the time when you’re in a trade? Can you sleep at night? Average traders don’t have confidence in their system or their plan so they’re usually pretty nervous whenever they’re in a trade. You quickly give back to the market your recent gains.

Let me know if this sounds familiar: You make $500 on a winning trade. You feel great. And then on the very next trade you get cocky and end up losing $700 and give back all of those gains that you just made to the market and more. This is very common. It doesn’t mean you’re a failure. It just means that you’re an average trader.

You try to recoup losses immediately, also known as revenge trading. Basically, here is how it occurs… You take a modest loss on a trade, let’s say $1,000. Now, you feel you are on a mission. You immediately go out looking for a trade so you can make up for that $1,000.00 loss. You end up chasing a bad entry or for whatever reason you end up pushing the pace and get into a wrong share and you end up losing even more. Does this scenario sound familiar?

You’re glued to your computer screen all day long watching every price movement like a hawk. This goes hand in hand with your emotional swings. It goes up, you’re happy; it goes down you’re ready to beat your head on the keyboard. If you’re stuck all day watching prices and you’re constantly on an emotional roller coaster? Don’t worry. You’re not alone.

How about this one? Do you ever review your trade results and follow up on your winners and your losers? I can guarantee you that professionals definitely follow up on their trades. And if you’re not following up on your winners – do you think this might be a good idea? You have a winning trade and you actually look back at it and say “Hmm, what did I do right in this trade?” How about your losing trades? How about looking at your mistakes and determining where you’re going wrong over and over again? Do you think that’s something that might help you improve your trading? Most people don’t do this and they continue to lose. This is why they’re average traders.

Here’s a really easy one. Are you losing money in the stock market? If you are, you’re like the majority of people, which puts you in the average trader category.

To be a successful trader you need a Trading Plan not based on emotion and have the discipline to follow it. To have this discipline means following a set of rules like a robot without emotion and taking the appropriate action when required. The 4 major components of a trading plan are:

1. What to trade and when – Comes with Education and Experience

2. How many to trade – Money Management also known as Position Sizing

3. When to get out when you have it wrong – Risk Management aka Initial Stop Loss

4. When to get out when you have it right – Risk Management aka Profit/Trailing Stop

“Cut your losses FAST and let your PROFITS run”, sound familiar?

So now you have a trading Plan or set of rules that will tell you what, when and how many to buy and when to get out. How about performance? How do you measure the performance of your portfolio?

How do I measure the performance of each trade?

How does the performance of my portfolio compare to the Stock Market Index?

You have back tested the Money Risk Management rules and find it simple enough to follow. It does result in some losses but overall it has a positive Trade Expectancy.

So what do you do next? Download your FREE 14 day fully functional trial from here.

JBL Risk Manager will help you trade just like professional traders, sometimes better. It will remove emotion and guesswork from your trading decisions.

I wish you all share trading success

Joseph

Joseph Barrington-Lew has helped 1000’s of novice and seasoned traders understand the importance of using correct Money and Risk Management principles in their share trading decisions over the past 14 years here in Australia and Overseas. JBL Risk Manager integrates with MetaStock format local data. readily available from resellers around the globe and JBL RM was developed to give you the edge over most traders who are not familiar with the correct Money Risk Management principles. Again.

Keeping Your Public Contents and The Rest Unshared – ASP NET Hosting

The ASP.NET hosting services offer many different packages to the website owners who hire their services, the rates of these packages increase as the amount of privacy required also increases. If the provider is experienced and the service is pure business and put customer satisfaction as priority type then it will definitely not offer you any cheaper rates. Even with the entire high price and costly problems, website owners should always opt for the quality services especially if their website are being used as business vehicle.

The One Right Way of The Two

The ASP.NET hosting services offer two options to their users when it comes to the space feature. They offer private space but they also offer shared space. The private and unshared space mean that there will be no intrusion or disturbance of your data and there will be no risk of your data getting tracked or harmed. Your data will be highly protected by antivirus and firewalls and it will also have all the space allotted only for your site.

On the other hand, the shared space is much risky side of the deal. The storage space is shared with multiple users or generally one more user. The data is protected but still in risk as there is very less privacy, if one user upgrades its data, it will affect the space available for other users. If one user’s website is using more speed and space then it will definitely effect other websites and downtime may occur because of all the heavy traffic are being attracted to the first website. Similarly, the first website can face the same damages if the second website starts to use more space. The shared space deals are generally not very useful and the cause of many problems. They are only good for those who are not using their websites for business purposes or they don’t need large space to upgrade.

The Coding

The ASP.NET hosting has the advantage of its efficient coding technique and website owners can upgrade their websites by uploading heavy applications because they can easily be managed by the ASP.NET hosting service. You can also fill your website with application programs and tools for better advertisement and traffic, but all of these will only be made possible in an efficient way when you opt the unshared space. Your traffic will increase greatly and your website will not face any 404 errors while running and handling all the heavy traffic.

Once your data is unshared, you can add up all you want as long as your website is paying your money back in good amount along with the interest. Even when the contents of your site are public, it is necessary that users who visit your website have limited access and neither does any other external attack or Trojan is bale to break your firewall and antivirus protective boundaries.

How to Calculate Earnings Per Share

Earnings per share is the allocation of a company’s net income to each outstanding common share of stock. Earnings per share is used by Wall Street & other stock market analysts to measure the profitability of a company versus another company in the same industry, plus is a way of evaluating quarterly financial results of the company. The formula for calculating Earnings per Share is:

EPS = (Net Income – Dividends on Preferred Stock) / Average Outstanding Shares

Average outstanding shares is also known as the Weighted Average number of shares because since a company’s outstanding shares on the stock market change all the time, we like to use an average that represents a fair number of shares throughout the year. Some companies use the outstanding number of shares at the end of one period in order to simplify their calculations.

Calculate Earnings per Share

Here’s a hypothetical example. ZZZ Corp. has a net income of $50 million for the year ended December 31st, 2010 and has 20 million shares outstanding on the New York Stock Exchange (NYSE). The company does not have any preferred shares outstanding so it does not have to pay out any preferred dividends. What is the Earnings per Share?

EPS = (Net Income – Dividends on Preferred Stock) / Average Outstanding Shares

EPS = ($50 million – $0) / 20 million shares

EPS = $2.50

Analyst Estimates on EPS

Most large cap organizations in the United States have several Wall Street analysts that closely follow the company’s earnings and business operations in order to forecast an earnings per share number. Analysts following a company like to issue EPS estimates for for the most recent quarter, the next quarter, the current fiscal year and the next fiscal year. The average of all analysts’ estimates are tabulated and a final EPS estimate is released on the financial media. Other information that comes along with EPS estimates is:

i) Number of Analysts – This indicates the number of analysts that have provided estimates for this company and are closely monitoring the business.

ii) High/Low Estimates – This provides estimates of the low end of the EPS versus the high end; generally the closer these estimates are together, the more confident you can be of the earnings estimate.

Manage Your Small Business For Profit, Not For Market Share

There is a huge misconception in business that the way to get higher profits is to market strongly, increase customer numbers and gain a greater market share. For years there has been a very strong message that the way to increase profits is to grab a larger slice of the market. As a result, this has filtered through to the small business managers who have aligned their businesses gain more customers and get a bigger market share.

This has created a situation where small business managers devote all their attention to gaining more customers, promoting your business to gain a large market share sometimes had a considerable cost. Regrettably, this is the wrong approach. There is enough evidence around the world to show that businesses who have learned how to direct their efforts into improving their revenue quality rather than selling greater volumes are much, much more profitable.

For many years now, the gurus have been urging small business managers to use a variety of strategies and techniques to increase their market share as a way of making more profit. Whenever a small business lets market share or sales volume guide their action then they will never reach their earnings potential. The evidence is clear. Firstly, focus on profit.

The logic is frighteningly simple. If your business produces 8% net profit from revenue increasing revenue is still going to produce 8% net profit. Unfortunately the cost of increasing revenue is normally out of proportion to the increased profit and this shows as a decrease in net profit as a percentage of turnover. The cost of acquiring new customers is six times more than the cost of increasing sales to existing customers. Where is the sense in this?

The obvious strategy is to increase the profit from existing activities to its highest level so that there are some options. Your efforts should be on increasing net profit rather than increasing market share because of the cost. Once you are making the maximum net profit from your existing customers, you are in a strong position. You can then use your judgement to work out the return on investment for increasing market share or broadening the customer base.

For the small business owner this is a no-brainer. Focus on making the maximum amount of profit before you even consider broadening your customer base or increasing your market share. The cost of increasing market share or broadening your customer base is much higher than most people believe. If they did the math they would soon see that making the maximum amount of profit is the smartest move.

Stock Price Evaluation: Earnings Per Share and Diluted Earnings Per Share

There are many ways for investors to evaluate company profitability and stock prices. In fact, it is suggested by many advisors and analysts that multiple financial measures be used to fully understand a company’s existing and potential performance that could lead to an increase in dividend payouts and returns from an increase in stock price. Two of these important measures are the earnings per share (EPS) and diluted earnings per share. Both are a ratio that reflect a corporation’s net income and allow investor’s a simplified way to compare the stock price and performance of different companies.

Earnings per share and diluted earnings per share are calculated ratios of a company’s net income to the number of common stock shares outstanding. As stated above, the EPS figures reflect a company’s profitability, so a higher EPS can indicate higher net income. When comparing two or more stocks, the EPS allows for a basic comparison of the companies’ earning potential. For example, if someone were reviewing two companies in the same industry and sees that Company A has an EPS of $5.00 and Company B has an EPS of $10.00, it would be clear that Company B is simply earning more money per share than Company A. This is not to say that Company B is actually more profitable, it could simply have less issued shares than Company A.

Diluted earnings per share is calculated the same way as basic EPS in relation to the number of shares outstanding, however, the math used for the amount of shares outstanding is taken a step further. Under diluted earnings per share, any issued long-term debt (bonds/stock options) or convertible preferred stocks must be accounted for in the amount of shares outstanding. This causes diluted earnings per share to be less than basic EPS in dollar amount, but not necessarily less important or a reflection that the company stock is over valued. Actually, some investors or analysts prefer to base investing decisions from the diluted EPS figure since it reflects an entity’s use of various stock options and shows a worse case scenario for pricing if all options were to be put into place.

Sometimes both basic EPS and diluted EPS will be taken a step further to evaluate an entity’s future performance. These predicted calculations will use expected future net income in order to show a possible increase or decrease in EPS. These figures are another matrix that investors can use to easily compare and contrast a company’s performance from today to a point in time in the future, usually one fiscal year. The hope is that investors can make easy value determinations of their stocks based on the expected future earnings by using simplified ratio matrices.

Some may argue that EPS is the most important figure available in evaluating a company and their stock price. At the end of the day, investors simply want to know how much money the companies they have invested in are earning, and the EPS figures put that in an up-front and easy to understand number. The EPS is used directly to calculate a stock’s price/earnings (P/E) ratio. While the P/E ratio is another very important evaluation number, it would require it’s own article for full explanation, the EPS is a factor in calculating the P/E ratio so therefore some analysts rank the EPS higher in importance. The P/E ratio tells an investor how much they are paying for $1.00 in company earnings by purchasing the stock. The use of EPS in this ratio ties them together in the evaluation of a company’s net income and determination of how expensive a share price truly is.

The basic earnings per share and diluted earnings per share figures are just two of multiple numbers, figures, and matrices used in determining the true value of a company, its share price, and potential return on one’s investment. As stated before, the EPS should not be the only factor used to finalize an investment decision, but it may be the most important. The EPS may be the most direct way to answer the question of how much a company makes and what that entity is worth.