Earnings per share measures how many dollars of net income the company has. The ESP needs to be higher because it shows a sign of higher earnings, strong financial position, and a reliable company to invest money. Earnings per share leads to price-earnings ratio which measures its current share price relative to its price-share earnings (Investopedia). Looking at Delta’s four-years price-earnings ratio, it indicates 2012 and 2013 had a low price-earnings ratio because the company is below 12 which means their future earnings are at risk or likely to grow slows. It also means Delta is currently undervalued by two years. In year 2014, Delta’s price-earnings ratio is higher compare to 2013.
Earnings per share measures how many dollars of net income the company has. The ESP needs to be higher because it shows a sign of higher earnings, strong financial position, and a reliable company to invest money. Earnings per share leads to price-earnings ratio which measures its current share price relative to its price-share earnings (Investopedia). Looking at Delta’s four-years price-earnings ratio, it indicates 2012 and 2013 had a low price-earnings ratio because the company is below 12 which means their future earnings are at risk or likely to grow slows. It also means Delta is currently undervalued by two years. In year 2014, Delta’s price-earnings ratio is higher compare to 2013.