Earnings per share: Difference between revisions

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''Financial ratio analysis - performance ratios.''
(EPS or eps).  
(EPS or eps).  


Profit attributable to ordinary shareholders ÷ Weighted average number of shares in issue during the period.
 
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'.
Profit after tax attributable to ordinary shareholders is often known as 'earnings' or 'net profit'.




Relevant accounting standards include IAS 33 and Section 1 of FRS 102.
:<span style="color:#4B0082">'''''EPS example'''''</span>


:Earnings for the period are £40 million and the weighted average number of shares is 50 million.


<span style="color:#4B0082">'''''EPS example'''''</span>
:EPS = £40m / 50m


Earnings for the period are £40 million and the number of shares is 50 million.
:= '''£0.80''' (= 80 pence)


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 ==
== See also ==
* [[Adjusted earnings]]
* [[Basic earnings per share]]
* [[Bootstrap effect]]
* [[Bootstrap effect]]
* [[Diluted earnings per share]]
* [[Diluted earnings per share]]
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* [[IAS 33]]
* [[IAS 33]]
* [[FRS 102]]
* [[FRS 102]]
* [[Net profit]]
* [[NOSH]]
* [[Ordinary shares]]
* [[Pence]]
* [[Price to earnings ratio]]
* [[Price to earnings ratio]]
* [[Profit attributable to ordinary shareholders]]
* [[Reported earnings]]
* [[Shareholder value]]
* [[Shareholder value]]
* [[Weighted average]]
[[Category:Accounting,_tax_and_regulation]]

Latest revision as of 20:38, 10 February 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