Briefly discuss the importance of GAAP for EPS to analysts evaluating companies based on price-earnings ratios. Consider comparisons for a company over time, as well as comparisons between companies at a point in time.

The importance of Generally Accepted Accounting  Principles (GAAP) for Earnings Per Share (EPS) to analysts evaluating companies based on price earnings ratio is reduction of risks of mis-interpretation and avoidance of fraud.

Explanation:

GAAP helps to protect the rights of stakeholders such as Investors.

EPS is key to picking a good stock. It ia derived by calculating a company's net income y its number of outstanding shares.

when the EPS growth rates is 25 per cent and above, it is favorable and suggests a company whose products and services is in strong demand

A company with consistent increase in EPS growth rates especially in recent quarters  is a good place to Invest.

earnings growth improves stock success and has tremendous impact on pricing.

For instance, The EPS rating of a comapny was analyzed over a period of three years with extra consideration on recent quarters. The results is a assigned 1 to 99.

if the company has a rating of 90 at this point in time, that the company;s profit growth has exceeded 90 percent of all other traded companies.