eps

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chetan (Querist)
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26 April 2009 what is mean by basic Earning Per Share (EPS) and diluted Earning Per Shares (EPS)?
and the difference between these two eps?
thank u in advance.....

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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26 April 2009 Basic earning per share -
Profit after taxes / number of shares
which the company has made earnings.

Diluted earning per share -
the amount of profits which has been absorbed through adjustment for carryforward losses and dividend distribution / number of shares.

For eg. Profit after tax - 100000
number of shares - 10000
earning per share - 10

dividend distrubuted - 20000
old losses adjustes - 40000
Total - 60000 / number of shares - 10000
Diluted earning per share - 6