The capital increase also said that most investors have good ability, but due to the small size of the capital, their profitability and capital management ability can not be fully played.
The most direct way to solve this problem is to expand the working capital.
For example, issuance, etc are capital increases, for example, if the issue of new shares, will dilute earnings per share, because earnings per share is equal to the company’s net profit divided by the number.
When net income remains constant, an increase in the number of common shares will reduce EPS, and may lead to an increase in EPS if the newly invested capital brings higher earnings to the company.
If you have a well-performing, well-run company, with a cash increase, you still have a chance to maintain the same profit margin and continue to grow.