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'. | ||
<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 | ||
= £0.80 (= 80 pence) | := '''£0.80''' (= 80 pence) | ||
Relevant accounting standards include IAS 33 and Section 1 of FRS 102. | 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]] | ||
| Line 26: | Line 41: | ||
* [[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.
