Earnings per share: Difference between revisions

From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson
(Add links.)
(Add link.)
 
(One intermediate revision by one other user not shown)
Line 21: Line 21:
:<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 weighted average number of shares is 50 million.


:EPS = £40m / 50m
:EPS = £40m / 50m
Line 33: Line 33:
== See also ==
== See also ==
* [[Adjusted earnings]]
* [[Adjusted earnings]]
* [[Basic earnings per share]]
* [[Bootstrap effect]]
* [[Bootstrap effect]]
* [[Diluted earnings per share]]
* [[Diluted earnings per share]]
Line 41: Line 42:
* [[FRS 102]]
* [[FRS 102]]
* [[Net profit]]
* [[Net profit]]
* [[NOSH]]
* [[Ordinary shares]]
* [[Ordinary shares]]
* [[Pence]]
* [[Pence]]
Line 47: Line 49:
* [[Reported earnings]]
* [[Reported earnings]]
* [[Shareholder value]]
* [[Shareholder value]]
* [[Weighted average]]


[[Category:Accounting,_tax_and_regulation]]
[[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