Basic Loss Per Share
Basic earnings per share refers to the net profit loss borne by each ordinary share equity during a certain period of time. It is one of the important indicators to measure the profitability of a company. The smaller the basic earnings per share, the stronger the company's ability to withstand losses and the greater the investment risk.
Definition: Basic loss per share refers to the net loss attributable to each ordinary share of a company over a specific period. It is an important indicator of a company's profitability. The smaller the basic loss per share, the stronger the company's loss-bearing capacity, and the higher the investment risk.
Origin: The concept of basic loss per share originates from financial statement analysis, particularly the net profit data in the income statement. As modern corporate financial management evolves, investors and analysts require more refined metrics to assess a company's profitability and financial health, making basic loss per share an important financial indicator.
Categories and Characteristics: Basic loss per share has the following characteristics:
- Simple calculation: The formula for basic loss per share is net loss divided by the weighted average number of ordinary shares.
- Reflects company profitability: The smaller the basic loss per share, the less the company has lost over a specific period, indicating weaker profitability.
- Investment risk indicator: Companies with larger basic loss per share typically face higher investment risks.
Specific Cases:
- Case 1: A company had a net loss of 5 million yuan in 2023, with a weighted average number of ordinary shares of 10 million. The basic loss per share is 0.5 yuan, meaning each ordinary share bore a loss of 0.5 yuan in 2023.
- Case 2: Another company had a net loss of 2 million yuan in 2023, with a weighted average number of ordinary shares of 5 million. The basic loss per share is 0.4 yuan. Comparatively, this company's basic loss per share is smaller, indicating a lower degree of loss.
Common Questions:
- Q: What is the difference between basic loss per share and earnings per share?
A: Basic loss per share refers to the net loss attributable to each ordinary share over a specific period, while earnings per share refers to the net profit attributable to each ordinary share. - Q: Is a smaller basic loss per share better?
A: Yes, a smaller basic loss per share indicates less loss and stronger profitability.
