Why should shareholders and prospective investors monitor earnings per share clo

Shareholders and prospective investors should monitor earnings per share closely. In some instances, the pressure of maintaining a continued growth record in net income or earnings per share has led management to "cook the books" or misrepresent financial information so that the business's bottom line appears better than it actually is. Such fraudulent behavior was the notable downfall of companies such as Enron, WorldCom, and Tyco, and is the reason why the Sarbanes-Oxley Act of 2002 was passed into law. Therefore, it is best not to rely on any one financial measure and to look at the financial statements and other information as a whole.