10 June 2009
In 07-08 profit was 20 lac. No. of shares 15,000 for 10 months, 20,000 for remaining two months as 5000 additional shares were issued for cash. No. of shares (Avg.)= 15833 shares EPS:- Rs. 126.32
Now, in 08-09, profit is 25 lac. No. of shares 20,000 for 12 months EPS:-Rs. 125
PROBLEM IS FOR THE RESTATED EPS IN BALANCE SHEET FOR PREVIOUS YEAR 07-08, WHAT IS THE NO. OF SHARES FOR 07-08 ???
whether take 20,000 shares issued for whole 12 months in 07-08, or to take 15,000 shares for 10 months and 5,000 shares for 2 months.
10 June 2009
Restated EPS doesnt necessarily mean that calculation of weighted average no. of shares has been changed. Restated EPS normally occurs because of restatement of profit for the respective year, which accordingly changes the EPS.
The calculation of weighted average no. of shares should be calculated as (15000*10)+(5000*2)/12.
10 June 2009
In this case the Profit includes Preferred dividends that would have been paid on Preference shares and the calculation for Weighted Av. No. of shares will remain same. Distributable Profit will increase and no. of shares will remain same.
CAclubindia
