FRC Thematic Review

Earnings Per Share and Is It Well Defined?

The views expressed in this article are those of its author and not necessarily those of ShareSoc. Most investors rely on Earnings Per Share (EPS) as a measure of the performance of a company. In theory it’s a simple calculation based on post-tax earnings divided by the number of ordinary shares in issue as defined by the IAS 33 accounting standard (see link below). But the number of shares can be affected by the future exercise of options, convertibles and warrants so in ...