To determine which of the given options is a profitability ratio that uses the number of outstanding shares in the calculation, let's go over each option:
1. Capital gain:
- Capital gain refers to the increase in the value of an asset or investment over time. It is not typically related to a profitability ratio.
2. Net income:
- Net income is a measure of a company's total earnings or profit. It is an absolute number and does not take into account the number of outstanding shares for its calculation.
3. Earnings per share (EPS):
- Earnings per share is a profitability ratio that explicitly uses the number of outstanding shares in its calculation. EPS is calculated by dividing the net income by the number of outstanding shares.
4. Price per share:
- Price per share refers to the market price of a single share of a company's stock. It is not a profitability ratio but rather a market value metric.
5. Dividend yield:
- Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its share price. While it involves dividends and share prices, it is not primarily focused on profitability.
From the analysis above, the option that correctly represents a profitability ratio that uses the number of outstanding shares in its calculation is Earnings per share.
Thus, the answer is:
Earnings per share.
