Earnings per share: Difference between revisions
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(EPS or eps). | (EPS or eps). | ||
EPS measures the annual profits earned for each ordinary share in a company. | |||
In simple terms, EPS is calculated as: | |||
Profits '''÷''' number of shares | |||
Defining these terms more strictly, they are: | |||
Profit attributable to ordinary shareholders '''÷''' Weighted average number of shares in issue during the period. | Profit attributable to ordinary shareholders '''÷''' Weighted average number of shares in issue during the period. | ||
Profit after tax attributable to ordinary shareholders is often known as 'earnings' or 'net profit'. | Profit after tax attributable to ordinary shareholders is often known as 'earnings' or 'net profit'. | ||
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EPS = £40m / 50m | EPS = £40m / 50m | ||
= £0.80 (= 80 pence) | = '''£0.80''' (= 80 pence) | ||
Relevant accounting standards include IAS 33 and Section 1 of FRS 102. | Relevant accounting standards for the consistent calculation and reporting of Earnings per share include IAS 33 and Section 1 of FRS 102. | ||
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* [[IAS 33]] | * [[IAS 33]] | ||
* [[FRS 102]] | * [[FRS 102]] | ||
* [[Ordinary shares]] | |||
* [[Price to earnings ratio]] | * [[Price to earnings ratio]] | ||
* [[Profit attributable to ordinary shareholders]] | * [[Profit attributable to ordinary shareholders]] | ||
Revision as of 15:03, 6 February 2019
Financial ratio analysis - performance ratios.
(EPS or eps).
EPS measures the annual profits earned for each ordinary share in a company.
In simple terms, EPS is calculated as:
Profits ÷ number of shares
Defining these terms more strictly, they are:
Profit attributable to ordinary shareholders ÷ Weighted average number of shares in issue during the period.
Profit after tax attributable to ordinary shareholders is often known as 'earnings' or 'net profit'.
EPS example
Earnings for the period are £40 million and the number of shares is 50 million.
EPS = £40m / 50m
= £0.80 (= 80 pence)
Relevant accounting standards for the consistent calculation and reporting of Earnings per share include IAS 33 and Section 1 of FRS 102.
