El videoarte como herramienta de crítica al servicio de grupos marginados.

The PER is one of the most popular key figures used by investors and analysts.918 _{Many investors rely on accounting or accounting key figures by} coming to an investment decision.919 _{Therefore, before introducing value based} performance measures selected common traditional key figures are presented and analysed. The PER and EPS are widely used key figures in order to evaluate the performance of a company, especially in America and Great Britain. This is the reason for the selection within the framework of this dissertation.920

The PER shows the assessment of a company on the stock market as a multiple of its profit.921 _{The higher the PER, the longer the time until a company} has earned the stock price through its annual earnings.922 _{If an investor would buy} shares of a company this key figure reveals after how many years the investment has amortised. The premise is that the earnings remain constant over these time period.923 _{PER is a reciprocal return key figure because the denominator contains} the earning figure.924

The PER is calculated as follows:

𝑃𝐸𝑅 = 𝑀𝑎𝑟𝑘𝑒𝑡 𝑝𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒

𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑝𝑒𝑟 𝑆ℎ𝑎𝑟𝑒

Source: Formula adapted from: Garrison, R. H., Noreen, E. W., Brewer, P. C. (2012), p. 687

Formula 11: Calculation of PER 917 _{Cf. Baetge, J., Solmecke, H. (2006), pp. 20-21.} 918 _{Cf. Hasler, P. T. (2011), p. 305.} 919 _{Cf. Elshandidy, T. (2014), p. 177.} 920 _{Cf. Günther, T. (1997), p. 50; Wagenhofer, A. (2013), p. 253.} 921 _{Cf. Busse, F.-J. (2003), p. 212; Groll, K.-H. (2000), p. 70.} 922 _{Cf. Gräfer, H., Gerenkamp, T. (2016), p. 140.} 923 _{Cf. Schmidlin, N. (2013), p. 112.}

Basically, a PER above “one” indicates an overvaluation and a PER below “one” an undervaluation.925 _{If two companies do not differentiate in their share} price and their return on equity, investors prefer the company with the lower PER.926

As PER includes the stock price, the key figure summarises the risk and future growth possibilities expected by the shareholders and market participants.927 _{This is the reason why it is possible to calculate the PER also with} the expected earnings of the next period.928

As the stock price is constantly changing, the PER also fluctuates.929 _{This key} figure can be used to assess the current stock price of a company. A sector average of the PER is needed which then can be multiplied with a company’s earnings in order to receive an adequate PER. This value can be compared with the actual PER.930 _{In some cases its difficult to use PER as a measure for} comparison. Take successful and highly priced companies, e.g. Amazon. Their PER is not comparable with competitors.931

As a rule of thumb, investors assume that the PER should not exceed the profit growth rate.932 _{Companies with high earnings growth rates have a high PER} because the prospective earnings are included in the share price. Companies with low earnings growth rates show a low PER because the outlook reveals that the earnings are not growing so fast. The stock price reacts accordingly.933 _{The PER is}

925 _{Cf. Coenenberg, A. G., Haller, A., Schultze, W. (2014), p. 1158; Penman, S. H.} (2013), p. 80.

926 _{Cf. Coenenberg, A. G., Haller, A., Schultze, W. (2014), p. 1158; Perridon, L.,} Steiner, M., Rathgeber, A. (2016), p. 249.

927 _{Cf. Wisniewski, T. P., Lightfoot, G., Lilley, S. (2012), p. 110.} 928 _{Cf. Schmidlin, N. (2013), p. 112.}

929 _{Cf. Perridon, L., Steiner, M., Rathgeber, A. (2016), p. 249.} 930 _{Cf. Küting, K., Weber, C.-P. (2015), p. 333.}

931 _{Cf. Brealey, R. A., Myers, S. C., Allen, F. (2011), p. 105.} 932 _{Cf. Groll, K.-H. (2000), p. 71.}

933 _{Cf. Garrison, R. H., Noreen, E. W., Brewer, P. C. (2012); p. 687; Schmidlin, N.} (2013), p. 113.

influenced by several factors like earnings growth rate, market position, capital structure, risk and management quality.934

Advantages of this key figure are that it is easy to calculate, it is well-known on an international level and the market evaluation of a company can be compared with the help of PER of a peer group.935

A key disadvantage is that the key figure is only usable for companies which generate profits. If a company reveals a loss, the key figure is useless.936 _A further disadvantage is that the stock price is influenced by many factors which partly can only be influenced in the long-term.937 _{The EPS figure as part of PER} calculation is a book value which can be manipulated by utilising accounting rules.938

The EPS is an important key figure for stocks evaluation at capital markets939 _{and one of the most used key figures in the US.}940 _{IFRS prescribe} companies to calculate basic and diluted EPS941 _{in order to compare the} performance of companies in a better way.942

Basic EPS is calculated as the division of profit or loss attributable to ordinary equity holders and the weighted average number of ordinary shares outstanding during the period.943

Diluted earnings per share consider earnings effects through interest payments due to convertible or option bonds.944 _{The nominator is increased by} dividends and interests recognised in the period and all other changes that would result from a conversion of all potentially convertible shares. The weighted 934 _{Cf. Schmidlin, N. (2013), pp. 114-116.} 935 _{Cf. Heese, V. (2011), p. 66.} 936 _{Cf. Heese, V. (2011), p. 67; Hasler, P. T. (2011), p. 307.} 937 _{Cf. Schmidlin, N. (2013), pp. 114-116.} 938 _{Cf. Hasler, P. T. (2011), p. 329.}

939 _{Cf. Lüdenbach, N., Hoffmann, W.-D., Freiberg, J. (2015), § 35, marginal} number 1.

940 _{Cf. Laier, R. (2011), p. 58.}

941 _{Cf. IFRS Foundation (2016), IAS 33.66.} 942 _{Cf. IFRS Foundation (2016), IAS 33.1.} 943 _{Cf. IFRS Foundation (2016), IAS 33.10.}

of outstanding additional shares if all shares would have been converted.945 The general way of calculation for this key figure is:

𝐸𝑃𝑆 =

𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠

𝑊𝑒𝑖𝑔ℎ𝑡𝑒𝑑 𝑎𝑣𝑒𝑟𝑎𝑔𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑠ℎ𝑎𝑟𝑒𝑠 𝑜𝑢𝑡𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑔

Source: Formula adopted from: Krause, H.-U., Arora, D. (2010), p. 43 Formula 12: Calculation of EPS

A high value of EPS shows investors that a share might be attractive because the company is able to generate a high profit. The contrary is valid for low EPS key figures.946

EPS is a convenient key figure to compare the performance of a single company over time. Nevertheless, it has to be considered that this key figure does not deliver information about the level of profitability. If two companies differ significantly in their share prices, the company with the higher share price has delivered a poorer profitability.947

Despite the named purpose of EPS and the fact that value relevance research indicates that earnings per share delivers useful information to investors,948 _{this key figure is criticised within scientific literature. EPS alone can} be a misleading key figure. Due to a lower EPS key figure a company does not necessarily deliver a poorer performance than a comparable company. The number of shares influences the result heavily. As a complementary key figure, the Return on Equity should come into consideration.949 _{Beyond the leeway for} manipulation due to the number of shares, the key figure can distort the true performance due to a different structure of the equity capital. EPS key figure considers only the capital stock and not capital contained in reserves.950

945 _{Cf. IFRS Foundation (2016), IAS 33.32.}

946 _{Cf. Loose, T. (2009), p. 20; Wagenhofer, A. (2013), p. 253.} 947 _{Cf. Krause, H.-U., Arora, D. (2010), pp. 43-44.}

948 _{Cf. exemplarily the empirical study of Balsam, S., Lipka, R. (1998).} 949 _{Cf. Coenenberg, A. G., Haller, A., Schultze, W. (2014), pp. 1155 – 1157.} 950 _{Cf. Baetge, J., Kirsch, H.-J., Thiele, S. (2004), pp. 454-455.}

Furthermore, the earnings number in the nominator can be influenced with accounting policy. Insofar, it is questionable if EPS key figures are really a good basis for comparing companies.951 _{In total, the key figure is not convenient for a} profitability analysis. The earnings are not only based on the basic capital but on the total equity capital.952 _{This key figure is part of the key figure Price Earnings} Ratio (PER).953

In document Uso del propio cuerpo en el videoarte y la performance realizados por mujeres. Del radicalismo de Valie Export a la sugestión de Pipilotti Rist (página 166-184)