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No – it is the rate of return that the company is getting on investment.
Sir I get it’s the rate of return on investmet but I don’t understand the EPS/net assets per share formula. Will you please elaborate this, please. How is that Rate of return on investment.
The return on investment is the profit as a % of the amount invested.
Earnings means profit; net assets is the amount invested. It makes no difference whether you take total earnings and divide by total net assets, or whether you take earnings per share and divide by net assets per share – doing either will obviously give the same answer 🙂
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