EPS - Basic EPS Example - ACCA Financial Reporting (FR)
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32 Comments
N
Nelao Lucia·
Hi, on b) I calculated it as follows: 250 000 000/(50 000 000 + 500 000 000)= 0.45 per share. Is it not correct?
C
Cristina·
same here- I was curious why we are not taking into account the 50 000 000 shares issued on the 1st of August in our calclations....
A
allinenw·
it is taken into account but you need the weighted average for no of shares... 250m / 546m (not 550).
the issue only took place in 1 Aug, 1 month after the start of the fiscal year
S
Sarah·
hi
Kindly help me with explaining how example two was Calculated
F
Farhaan·
The solution for example 2 was very confusing for me so I referred to the study text and found these rules
Note: If you have an issue of shares at full market price and a bonus
issue, you apply a bonus fraction from the start of the year up to the
date of the bonus issue. For example, if the bonus issue was 1 share
for every 5 owned, the bonus fraction would be 6/5 (as everyone who
had 5 shares now has 6)
This applicable to c part of example 1
while the rule below is for
Bonus and market issues combined (EXAMPLE 2)
If a question gives both a bonus issue and an issue of shares at full price:
? apply the bonus fraction from the start of the year up until the date of the
bonus issue
? time-apportion the number of shares to reflect the cash being received
from the market issue.
Chris has not uploaded any lecture for ex 2, so we have to use the above rules
F
Farhaan·
Ignore the question marks they are meant to be bullet point lol
F
Francis·
June has no 31st day
S
Shanoya·
for example 1 (b) I am getting Basic EPS (250/546) = $0.46c (ie. .46cents)
why or how did you get $45.80c? (ie.45dollars 80cents?)
S
Shanoya·
update:
seeing now its just your way of writing. where though there is a point after rather than before the digits since it as the cents (c) symbol at the end it is still read as cents only not dollars and cents.
so unless you put the dollar sign ($) in front it is read as cents only.
ok.
D
David·
This is definitely one of the more challenging areas of FR. It helped me get my head round it when I understood that the purpose of the rights fraction was to pretend the "free" shares had always been in issue so we can compare with earlier periods.
V
Vanshita·
in part c of example 1 you mentioned that for bonus issue the date is ignored and it is assumed that the bonus shares have always been in issue and accordingly we didn’t use weighted average approach for 125 shares, however in example 2 there is a bonus issue on 1st Dec of 2500 shares and as per the solution provided the bonus shares are weighted average for 4 months. Can you please clarify the approach to be followed with bonus shares?
A
Amir·
Dear Chris
Thank you for your great and useful videos.
I just have question. is it enough to study opentuition notes and watch your lectures to pass the exam or need to study Kaplan book too ?F7 paper is my first exam so I have stress. Please guide me. Thank you <3
R
radhikachadha·
Thank you for your lectures,
In part c of example 1 you mentioned that for bonus issue the date is ignored and it is assumed that the bonus shares have always been in issue and accordingly we didn't use weighted average approach for 125 shares, however in example 2 there is a bonus issue on 1st Dec of 2500 shares and as per the solution provided the bonus shares are weighted average for 4 months. Can you please clarify the approach to be followed with bonus shares?
Thanks in advance!
M
manasatl·
Hi Criss,
There is a question on bonus fraction(i.e; example 2 as per the notes, can you please make a video on explaining that.
Thanks in advance.
L
Leena Yassin·
Hello
MR
would you pleas explain how you calculate 250M in the the last working no (D)
because when I calculated I got 253.6 = 254 M .
Thanks .
H
Huy·
I think because the price of share after 1 Feb X6 that we calculated were $1.38 per share, this is the price before of the period from 1 Feb X6 and to the end of the year we didn't have any change in the number of shares so, the price after are the same, Fraction = 1 and 600m*(5/12) = 250m
R
rsforza·
Mr. Barlow.
Can i trouble you with a question regarding example 1 d) at page 73 ?
You did not cover this in your audio lecture, but the text of page 133 implies that the extra shares are 63M.
I do not understand why we have to divide the 500m by 8
Thank you in advance for your consideration.
A
Asad·
1 for 5 offered at £1.25 when the market value is £1.40
So we are being offered 1share @ £1.25 = £1.25
For every 5 share which cost us £1.40 each = £7
So we now have 6 shares at a cost of £8.25 = 1.375
A
alawi sayed·
Hi ,
Thanks for your nice lectures,
In part d since there are 500m shares for the price of $ 1.4 and since the right issue happened on 1st Feb 2006 31,so calculating the no of shares from 1-Jul 2005 until 31 Jan 2006 for Seven months ,why not just to multiply 500 X 7/12 = 292m shares since that was before the issue
and then we calculate the no of share after the right issue.
Thanks,
B
Barb·
Because you need to apply the rights issue fraction to all periods prior to the rights issue
N
nomalangadube·
Greetings
My challenge is, if there is a full market price issue just before the bonus issue how do i treat that? I am failing to grasp it, if a qtn has a full market price followed by bonus issue.
D
Dipesh Shrestha·
Under the example of the right issue, for next year do we take the number of equity shares 600 million ? (600*12/12 - assuming no any changes in the number)
S
Syed mujtaba·
can you explain example 1 part d. where in ri8 issue.u have done this 5*1.40 and 1*1.25=8.25. my question is from where you get 5 & 1? kindly plzzz explain this.and also after & before issue
A
alaya·
Hi,
When we calculated the rights issue, why dint we include the additional 50m on 1st aug or the bonus issue in nov?
P
P2-D2Tutor·
Hi,
It is because each share issue is independent of the other, and so each part (a) to (d) is dealt with on an individual basis. It is important to understand how each issue of shares is dealt with individually before going on to anything more complex and a combination of the different scenarios.
Thanks
A
alawi sayed·
Hi ,
Thanks for your nice lectures,
In part d since there are 500m shares for the price of $ 1.4 and since the right issue happened on 1st Feb 2006 31,so calculating the no of shares from 1-Jul 2005 until 31 Jan 2006 for Seven months ,why not just to multiply 500 X 7/12 = 292m shares since that was before the issue
and then we calculate the no of share after the right issue.
Thanks,
J
joelsasi·
Thanks for the video.i have a question . ,4000000 shares issued on 31.12.2001 of easch 25 cents.on 1.7.2002 the entity made a right issue 1 for 4 at 50 cents each.share price before the issue was $1,profit after tax 425000 and 320000 for the year ended 31.12.2002 and 31.12.2001 respevtively
calculate eps for 2002(including compartive) can you please explain me?
P
P2-D2Tutor·
Hi,
I'm not here to answer a full question for you, sorry. If you explain where you are struggling specifically then am happy to help.
Thanks
D
diribsa123·
I want to stud ACCA online what shall I do??
P
P2-D2Tutor·
Hi,
If you're only looking to start the ACCA qualification then you want to be starting with the earlier papers. I'd recommend that you start by visiting the ACCA website (www.accaglobal.com).
the issue only took place in 1 Aug, 1 month after the start of the fiscal year
Kindly help me with explaining how example two was Calculated
Note: If you have an issue of shares at full market price and a bonus
issue, you apply a bonus fraction from the start of the year up to the
date of the bonus issue. For example, if the bonus issue was 1 share
for every 5 owned, the bonus fraction would be 6/5 (as everyone who
had 5 shares now has 6)
This applicable to c part of example 1
while the rule below is for
Bonus and market issues combined (EXAMPLE 2)
If a question gives both a bonus issue and an issue of shares at full price:
? apply the bonus fraction from the start of the year up until the date of the
bonus issue
? time-apportion the number of shares to reflect the cash being received
from the market issue.
Chris has not uploaded any lecture for ex 2, so we have to use the above rules
why or how did you get $45.80c? (ie.45dollars 80cents?)
seeing now its just your way of writing. where though there is a point after rather than before the digits since it as the cents (c) symbol at the end it is still read as cents only not dollars and cents.
so unless you put the dollar sign ($) in front it is read as cents only.
ok.
Thank you for your great and useful videos.
I just have question. is it enough to study opentuition notes and watch your lectures to pass the exam or need to study Kaplan book too ?F7 paper is my first exam so I have stress. Please guide me. Thank you <3
In part c of example 1 you mentioned that for bonus issue the date is ignored and it is assumed that the bonus shares have always been in issue and accordingly we didn't use weighted average approach for 125 shares, however in example 2 there is a bonus issue on 1st Dec of 2500 shares and as per the solution provided the bonus shares are weighted average for 4 months. Can you please clarify the approach to be followed with bonus shares?
Thanks in advance!
There is a question on bonus fraction(i.e; example 2 as per the notes, can you please make a video on explaining that.
Thanks in advance.
MR
would you pleas explain how you calculate 250M in the the last working no (D)
because when I calculated I got 253.6 = 254 M .
Thanks .
Can i trouble you with a question regarding example 1 d) at page 73 ?
You did not cover this in your audio lecture, but the text of page 133 implies that the extra shares are 63M.
I do not understand why we have to divide the 500m by 8
Thank you in advance for your consideration.
So we are being offered 1share @ £1.25 = £1.25
For every 5 share which cost us £1.40 each = £7
So we now have 6 shares at a cost of £8.25 = 1.375
Thanks for your nice lectures,
In part d since there are 500m shares for the price of $ 1.4 and since the right issue happened on 1st Feb 2006 31,so calculating the no of shares from 1-Jul 2005 until 31 Jan 2006 for Seven months ,why not just to multiply 500 X 7/12 = 292m shares since that was before the issue
and then we calculate the no of share after the right issue.
Thanks,
My challenge is, if there is a full market price issue just before the bonus issue how do i treat that? I am failing to grasp it, if a qtn has a full market price followed by bonus issue.
When we calculated the rights issue, why dint we include the additional 50m on 1st aug or the bonus issue in nov?
It is because each share issue is independent of the other, and so each part (a) to (d) is dealt with on an individual basis. It is important to understand how each issue of shares is dealt with individually before going on to anything more complex and a combination of the different scenarios.
Thanks
Thanks for your nice lectures,
In part d since there are 500m shares for the price of $ 1.4 and since the right issue happened on 1st Feb 2006 31,so calculating the no of shares from 1-Jul 2005 until 31 Jan 2006 for Seven months ,why not just to multiply 500 X 7/12 = 292m shares since that was before the issue
and then we calculate the no of share after the right issue.
Thanks,
calculate eps for 2002(including compartive) can you please explain me?
I'm not here to answer a full question for you, sorry. If you explain where you are struggling specifically then am happy to help.
Thanks
If you're only looking to start the ACCA qualification then you want to be starting with the earlier papers. I'd recommend that you start by visiting the ACCA website (www.accaglobal.com).
Thanks