Earnings per share: Difference between revisions
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imported>Doug Williamson (Add link.) |
imported>Doug Williamson (Add links.) |
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== See also == | == See also == | ||
* [[Adjusted earnings]] | |||
* [[Bootstrap effect]] | * [[Bootstrap effect]] | ||
* [[Diluted earnings per share]] | * [[Diluted earnings per share]] | ||
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* [[Price to earnings ratio]] | * [[Price to earnings ratio]] | ||
* [[Profit attributable to ordinary shareholders]] | * [[Profit attributable to ordinary shareholders]] | ||
* [[Reported earnings]] | |||
* [[Shareholder value]] | * [[Shareholder value]] | ||
[[Category:Accounting,_tax_and_regulation]] | [[Category:Accounting,_tax_and_regulation]] | ||
Revision as of 08:53, 15 February 2023
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 after tax 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.
