financial planning adviser

There are more than one way to look at earnings per share or EPS in regard to stock analysis. In fact there are five. If may be simple math but the ways that EPS are calculated and represented it is important in stock analysis to understand what they mean in order to make informed decisions.

When a company announces their earnings per share it may be significantly different from what is reported in the headlines as well as the financial statements. Earnings per share is a simple calculation of dividing the net income of a company by the number of outstanding shares. There can be different definitions of both the earnings and the number of shares outstanding and this is where the problems begin.

The number of shares outstanding could be either primary or fully diluted. Primary shares are calculated totaling all shares that are held by investors. These shares are in the market and can be traded. Diluted shares is a more complex calculation. The calculation determines how many shares would be outstanding if all options and warrants were converted in to shares at a specified time. Using diluted shares is a more conservative method to calculate earnings per share in stock analysis.

Companies will report both primary and diluted shares with most people focusing on the diluted EPS. However, you should not always assume this is the case. There are some instances where there is not a difference in the two calculations.

In general earnings per share in stock analysis are whatever the company wishes it to be. There are many accounting policies and assumptions that go into this stock analysis. Media may spin the number and what ends up being reported may or may not be the earnings per share that is reported to the SEC, Securities & Exchange Commission.

If a company reports a high earnings per share it will reduce the P/E multiple and the stock will appear to be undervalues. However, if the EPS is reported in the 10-Q it may result in a lower earnings per share and the stock may look overvalued when viewing on a P/E basis. This is why in stock analysis it is important to know the types of earnings used to calculate the earnings per share.

It is important to know that calculations and numbers can be portrayed in a variety of ways to create a very different result. This does not imply that there is anything wrong going on just a different method is legitimately being used. To make informed decisions you need to understand how the calculations are determined.

Financial planning is not just for the rich. Everyone can afford and benefit from the assistance of a financial planner. The best time to begin a relationship with a financial advisor is with your first job. You do not have to have a lot of money or assets to begin to invest and save. The fees charges by financial planners can vary from fee for service, or a flat rate or commission based. When you start earning money is the time you should begin to think about paying yourself for your future. The longer time you have money invested the larger it can grow.

Financial planners do not just sell you products. They can assist you to minimize your taxes, reduce your debt, evaluate your insurance needs, and manage your money and much more.

If you have an accountant do you need a financial planner? While accountants are knowledgeable they are not as versed in the aspects of financial services as a financial advisor is. It is important that your accountant and financial advisor work together for you to benefit the most. Your accountant focuses on your day to day and yearly financial issues of paying your bills and taxes while your financial advisor looks at your lifetime goals and aspirations and develops a plan to help you attain them.

If you are young and think you do not require the services of a financial planner then think again. The younger you are when you begin to invest the better your will be when you retire. The longer you wait to begin planning for the future the harder it will be.

Today most financial planners are paid based on the results they achieve for you. The better you do will mean more money for them. They have sliding scales for the service rates that they charge. There are rules and regulations about the fees that financial advisors can charge and how they must disclose them to you. You will be informed of how much and where your advisor is paid.

Not all financial advisers are equal. You should try to find a financial planner that understands your situation and works in your best interest. If possible try to get the names of some of their clients to get recommendation. If your friends or family members use financial planners see who they use.

Your financial plan should include building up a cash reserve to protect yourself in event of the unexpected. If your car breaks down, your furnace breaks, you lose your job what will you do if you do not have a cash reserve? Most financial experts agree that a reserve of at least six months wages is an adequate cushion in case of emergency.

For most individuals build up a cash reserve while paying their monthly expenses is difficult even if they are not in debt. It takes balancing your spending habits with your savings goals to develop a systematic and automatic savings program.

Saving systematically is just putting aside a certain amount of money at a regular interval. The frequency of savings can be weekly, monthly, biweekly or annually. This method of saving is easier to accomplish than just waiting until you have some extra cash. You are paying yourself first when you begin a systematic savings program. When you include a regular amount to invest in your savings it will become a part of your budget and an automatic process.

Some ways to come up with money to add to your savings might include refinancing your mortgage for a better interest rate. When you receive a raise or bonus at work have that money put into your savings. If you never consider the raise or bonus in your budget you will never miss it and you can watch your savings grow. If you receive a tax refund you should save that money and you should consider adjusting your deductions so you can save the money throughout the year and earn interest on it. Shop for lower auto, health, and home insurance rates.

Some ways to make systematic savings automatic is to have money automatically deducted from your paycheck if your employer offers that option. You can set up your bank account to automatically transfer funds from your checking account into a savings or investment account.

If you have money invested in a brokerage firm or mutual fund company they can set up transfers automatically as well. Be sure to reinvest any dividends from your investments to help grow those assets as well.

Others ways to invest in cash reserves are in Treasury notes and bonds. You can have these dividends deposited directly into a cash reserve account.

Keep in mind that many of these options will have tax implications. Be sure to consult with a financial advisor or tax expert regarding any taxes you may owe.