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Financial Glossary
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> "Earnings yield" Definition |
 Earnings yield
The ratio of earnings per share, after allowing for tax and interest payments on fixed interest debt, to the current share price. The inverse of the price/earnings ratio. It is the total twelve months earnings divided by number of outstanding shares, divided by the recent price, multiplied by 100. The end result is shown in percentage. We often look at earning yields because it avoids the problem of zero earnings in the denominator of the price/earning ratio.
The earnings of a company are its annual profits after deduction of tax, dividends to preference shareholders and bondholders. They are usually expressed on a per-share basis (e.g. 7p), and the earnings per share (EPS) figure is calculated by dividing total earnings by the average number of shares in issue for the relevant accounting period.e.g. earnings or Ј2m, with 10m shares in issue would give an EPS of 20pThe earnings yield is the EPS as a percentage of the current market price of the share. So if the EPS was 7p and the current market price is 116p, the earnings yield7 / 116 x 100 = 6.03%Earnings yield is not used as commonly as its reciprocal measure, the P/E ratio. On the same figures, the P/E would be:116 / 7 = 16.6
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Glossary 
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Earnings yield - The ratio of earnings per share, after allowing for tax and interest payments on fixed interest debt, to the current share price. The inverse of the price/earnings ratio. It is the total twelve months earnings divided by number of outstanding shares, divided by the recent price, multiplied by 100. The end result is shown in percentage. We often look at earning yields because it avoids the problem of zero earnings in the denominator of the price/earning ratio.
The earnings of a company are its annual profits after deduction of tax, dividends to preference shareholders and bondholders. They are usually expressed on a per-share basis (e.g. 7p), and the earnings per share (EPS) figure is calculated by dividing total earnings by the average number of shares in issue for the relevant accounting period.e.g. earnings or Ј2m, with 10m shares in issue would give an EPS of 20pThe earnings yield is the EPS as a percentage of the current market price of the share. So if the EPS was 7p and the current market price is 116p, the earnings yield7 / 116 x 100 = 6.03%Earnings yield is not used as commonly as its reciprocal measure, the P/E ratio. On the same figures, the P/E would be:116 / 7 = 16.6
Earnings yield : the ratio of earnings per share, after allowing for tax and interest payments on fixed interest debt, to the current share price. the inverse of the price/earnings ratio. it is the total twelve months earnings divided by number of outstanding shares, divided by the recent price, multiplied by 100. the end result is shown in percentage. we often look at earning yields because it avoids the problem of zero earnings in the denominator of the price/earning ratio.
the earnings of a company are its annual profits after deduction of tax, dividends to preference shareholders and bondholders. they are usually expressed on a per-share basis (e.g. 7p), and the earnings per share (eps) figure is calculated by dividing total earnings by the average number of shares in issue for the relevant accounting period.e.g. earnings or Ј2m, with 10m shares in issue would give an eps of 20pthe earnings yield is the eps as a percentage of the current market price of the share. so if the eps was 7p and the current market price is 116p, the earnings yield7 / 116 x 100 = 6.03%earnings yield is not used as commonly as its reciprocal measure, the p/e ratio. on the same figures, the p/e would be:116 / 7 = 16.6
