Perhaps the most widely used of all accounting statistic is earning per share of common stock. Everyone who buys or sells stock in a corporation needs to know the annual earning per share. Stock market prices are quoted on a per share basis. If you considering investing in IBM stock at a price of, say, $120 per share, you need to know the earning per share and the annual dividend per share in order to decide whether this price is reasonable. In order words, how much earning power and how much dividend income would you be getting for each share you buy?
