Earnings per share: Difference between revisions
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<span style="color:#4B0082">'''''EPS example'''''</span> | :<span style="color:#4B0082">'''''EPS example'''''</span> | ||
Earnings for the period are £40 million and the number of shares is 50 million. | :Earnings for the period are £40 million and the number of shares is 50 million. | ||
EPS = £40m / 50m | :EPS = £40m / 50m | ||
= '''£0.80''' (= 80 pence) | := '''£0.80''' (= 80 pence) | ||
Revision as of 13:40, 21 December 2020
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.
