Earnings per share: Difference between revisions
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* [[Reported earnings]] | * [[Reported earnings]] | ||
* [[Shareholder value]] | * [[Shareholder value]] | ||
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* [[Weighted average]] | * [[Weighted average]] | ||
[[Category:Accounting,_tax_and_regulation]] | [[Category:Accounting,_tax_and_regulation]] | ||
Latest revision as of 08:45, 21 December 2024
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 weighted average 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.
See also
- Adjusted earnings
- Basic earnings per share
- Bootstrap effect
- Diluted earnings per share
- DPS
- Earnings
- Economic value added
- IAS 33
- FRS 102
- Net profit
- NOSH
- Ordinary shares
- Pence
- Price to earnings ratio
- Profit attributable to ordinary shareholders
- Reported earnings
- Shareholder value
- Total shareholder return
- Weighted average
