Earnings per share and Extrapolation: Difference between pages

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imported>Doug Williamson
(Move example earlier.)
 
imported>Doug Williamson
m (Spacing and indentation)
 
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(EPS or eps).
# A straight-line estimation method where the estimated result lies beyond the range spanned by two or more known data points.
# More generally, any estimation method where the estimated result lies beyond the range spanned by two or more known data points.  (Not necessarily using straight-line methods of estimation.)


Profit attributable to ordinary shareholders ÷ Weighted average number of shares in issue during the period.
::Extrapolation is generally a less reliable estimation method than Interpolation.
 
Profit after tax attributable to ordinary shareholders is often known as 'earnings' or 'net profit'.
 
 
<span style="color:#4B0082">'''''EPS example'''''</span>
 
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 include IAS 33 and Section 1 of FRS 102.


::Extrapolation can be particularly unreliable when historical trends - for example historic growth rates - are projected into future periods for planning purposes.


== See also ==
== See also ==
* [[Bootstrap effect]]
* [[Approximation]]
* [[Diluted earnings per share]]
* [[Interpolation]]
* [[DPS]]
* [[Earnings]]
* [[Economic value added]]
* [[IAS 33]]
* [[FRS 102]]
* [[Price to earnings ratio]]
* [[Shareholder value]]

Revision as of 21:35, 13 August 2013

  1. A straight-line estimation method where the estimated result lies beyond the range spanned by two or more known data points.
  2. More generally, any estimation method where the estimated result lies beyond the range spanned by two or more known data points. (Not necessarily using straight-line methods of estimation.)
Extrapolation is generally a less reliable estimation method than Interpolation.
Extrapolation can be particularly unreliable when historical trends - for example historic growth rates - are projected into future periods for planning purposes.

See also