What Is Google's Earning Per Share Ratio?
Earning per share ratio is one of the profitability ratios computed by the net income less preferred dividends and divided the weighted average common shares outstanding. In 2015, Google’s earning per share ratio is $22.84. This indicates that if Google distributed every dollar of income to its shareholders, each shareholder would receive $22.84. In addition, Google’s earning per share ratios also increase from $20.57 in 2014 to $22.84 in 2015. These ratios in recent years are high, which means that Google is doing well in earning their profitability, and it also has more profits to distribute to its stockholders. However, this ratio is not so accurate and flexible in comparing the operating growth among different companies because that ratio also depends on the numbers of outstanding shares. For example, Google and Microsoft have almost the same amount of net income in 2015, which is approximate $16 billion. On the other hand, Microsoft’s earning per share ratio in 2015 is only $2.1, which is much lower than Google’s ($22.84). In addition, the company also uses the return on assets ratios in order to evaluate a company’s profitability. Return on assets ratios give investors an idea of how well the company uses the assets to generate earnings. It is calculated as the ratio of net income to the total assets. Google’s return on assets ratio is 11.36% in 2015,