lcai

It makes sense to remember what the term is. Companies return capital to shareholders directly in one of two ways :

1. By making dividend payments, which usually come out of earnings
2. By buying back shares of stock , thus reducing capital employed

Since the act of reducing shareholding makes the company more valuable to the remaining shareholders ( because their interests in future profits are increased , given lower number of shares) , we treat a change in shares to the negative as a good thing.

while a change to the positive i.e. a net issuance of additional shares ( representing a dilution of the current shareholders interest) as a bad thing.

So delta S is simply the period to period change in shares ( signed ) ,while the meaning to the shareholder is attributed with a negative sign in GK's formula.

+ve delta S ( net increase of shares) = bad thing i.e. has an effect of -( delta S)
-ve delta S ( net reduction of shares) = god thing i.e. has an effect of -( delta S)
where the term in parenthesis is a negatively signed quantity