Kgalema would like to buy shares in a listed textile company, but is dismayed to hear that their most recent EPS has decreased significantly. Why should this not be a concern for him until he conducts some research into the matter? (Exercise caution when answering this question as multiple responses may be correct.)

1. It may be a decrease in profits now for the protection of the reputation of the firm in terms of maintaining the quality of product or service they provide, despite an increase in the cost of raw materials

2. This could be an indication that the market in which the company operates is saturated with trading

3.Lower EPS may be matched with an decrease in cash flows

4.Lower earnings per share do not necessarily translate into a lower share price

5. All businesses will experience a decrease in their earnings at some point