Earnings available for Common Shareholders or Stockholders, usually abbreviated as EAC. It is a term that refers to profit after taxation and statutory reserves addition and possible payment of preferred dividends. Profit is paid out either as dividends or reinvested into the business. It measures the size of effect for shareholders holding common shares.
Calculation: EAC = EAT – statutory reserves addition – preferred dividend requirement
Use of EAC in practice: in business it is used by CFO in financial analysis to analyze ratios.
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