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Dear Sir,
I understood from your lectures that if shares are issued after reporting date (but before the date of approval of the accounts), the EPS in disclosure notes would be calculated based on the number of shares following the issue, as if the shares were issued at the reporting date. But how do I calculate the EPS?
For e.g., if I have 100,000 shares from Jan to March, and then 150,000 shares from April to December, with 20,000 shares issued after year-end, how does this 20,000 shares go into the weighted avg. number of shares?
i.e. 100,000 shares * 3 + 150,000 * 9 + 20,000 * ???Thanks in advance for your guidance.
Regards,
TimEPS is examined in FR much more than SBR.
You only take account of post-year end issues if they are bonus or rights issues.
If company has 10 shares in issue for the whole year, but makes a 1 for 2 bonus issue after the year end , the denominator in the calculation would be 15.
BUT
If company has 10 shares in issue for the whole year, but makes a 1 for 2 issue AT FULL MARKET PRICE after the year end , the denominator in the calculation would be 10.
🙂
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