For private companies, PER is not an exact science. The measure gives you a relative measure as to the value being derived from your revenues relative to your underlying equity structure. We do make assumptions however, that can derive a consistent indicator as to how efficient your business is in generating revenues relative to the total amount of equity within your business. Although not scientific, it can be used as a good barometer as to the progress of your business over time. Check your earnings per share now with Jazoodle

Definition used:

Shareholder’s Equity Divided by Net Assets:

Divided by

Total Net Profit divided by Equity (amount)

eg: Net Profit $30,000, Total Equity $5,000, Net Assets $65,000

PER equals (5000/65000) / (30000/5000) = 0.13

If your company PER is reducing, there are a number of things you can assess to identify the cause, and then improve the score. As always, please work with your accountant or business advisor for individual advice for your business. PER is affected by the following:

• Sales revenues.
• Cost of goods (direct costs)
• Overheads or expenses
• Other non operating income or expenses
• Financial structure of your company
• Retained earnings

• Other non operating income or expenses
• Financial structure of your company