Basic EPS & Diluted EPS

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Guest

Guest (Querist)

30 October 2009 I have a query :

How do I ascertain the Basic EPS & Diluted EPS ?

PAT is - Rs.592944
NO. OF SHARES - 20000
EPS (PAT/NO. OF SHARES) - RS.29.65

Please confirm whether EPS arrived out is in order.

Whether Basic EPS & Diluted EPS are same or any method to find out Diluted EPS.

I would like to know the way to arrive out the Diluted EPS.

Praveen Sharma

Praveen Sharma (Expert)
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30 October 2009 EPS is correct as per your e.g.

There is small diff. between Basic EPS & diluted EPS. You have to acertain dilutive no. of shares.

Guest

Guest (Querist)

30 October 2009 Dear Praveen,

I at first, thank you for your response.

In my case, as the company has just 20000 equity shares only, can I conclude that both Basic EPS & Diluted EPS are one and the same.

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CS Vandana Kacholia

CS Vandana Kacholia (Expert)
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30 October 2009 well in your case company has just equity shares so to calculate:

Basic EPS = NP after Tax/No of share outstanding at year

Diluted EPS = NP after Tax/Weighted Average No of share outstanding at year end including converted Deb/Preference share if any.

Regards

Guest

Guest (Querist)

30 October 2009 Dear Vandana,

While I thank you for your response, may I still expect you to conclude my query as
Basic EPS & Diluted EPS are one and the same, as in my case, the company has just 20000 equity shares, which were subscribed and fully paid by the subscribers.

In view of the reason mentioned, may I mention the same figure for both Basic EPS and Diluted EPS in the Form 23ACA.

Will that be in order ? Please confirm and thank you once again.

Ankur Garg

Ankur Garg (Expert)
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31 October 2009 Let me give you simple example:

EPS calculated by you i.e. 29.65 is correct. At this point of time your issued shares are 20000.

Suppose you have 5000 ESOP options which are yet to be converted in to equity shares. Now for calculating diluted EPS you have to take these 5000 shares in to account at this point of time.

Your diluted EPS would be:

592944/25000=== 23.72

and your EPS would be

592944/20000=== 29.65

Hope this is clear now.

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Guest

Guest (Querist)

31 October 2009 Dear Ankur,

Thank you so much for your response.

I still expect you to conclude my case, as this company does not have any shares other than equity shares.

Hence, my query once again will be, whether Diluted EPS shall apply or not.

If Diluted EPS shall not apply, I will mention '0' Zero in Form 23ACA and complete the filing.

Your final word is awaited.

Ankur Garg

Ankur Garg (Expert)
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31 October 2009 Let me tell you the exact funda. If you dont have any such conversion due as mentioned in my previous reply (ESOP etc) then in such case EPS == Dilited EPS.

The same case applies to you. So for the purpose of Form 23ACA treat 29.65 as normal as well as diluted EPS.

Go ahead and fill the same figure in both the boxes of Form 23ACA.

Technically you can not say that there is no diluted EPS in your company. As EPS == diluted EPS.

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Guest

Guest (Querist)

31 October 2009 Dear Ankur,

Once again, thanks a lot and I am fully comfortable to complete the filing.

Dear All,

I am so grateful for your responses for my query.