Earnings per share

The earnings per share ( english earnings per share , short EPS) is an economic indicator for assessing the profitability of a corporation , both to IAS / IFRS and after US GAAP for publicly traded companies each in annual financial statements must be published.

General

This key figure represents a special form of the return on equity . The aim must first be to uniformly define the profit of a company. These offers from the income statement of net income to, viewed from § 275 para. 3 no. 16 HGB in cost of sales results.

detection

To determine this key figure, the company's consolidated net income (in the period under review) is divided by the weighted average number of shares outstanding during this period .

${\displaystyle {\text{Gewinn je Aktie}}={\frac {\mathrm {Konzernjahres{\ddot {u}}berschuss} }{\text{Anzahl der Aktien}}}}$

Determination of different classes of shares

If for various classes of shares different (for example, for ordinary and preference shares) Dividends are paid additionally between the Plasma and thesauriertem to distinguish Profit:

${\displaystyle {\text{Gewinn je Aktie der Gattung}}={\frac {\mathrm {anteiliger\ thesaurierter\ Konzernjahres{\ddot {u}}berschuss} }{\text{Anzahl der Aktien der Gattung}}}+{\text{Dividende je Aktie der Gattung}}}$

The pro-rata retained consolidated annual surplus is the portion of the annual surplus to which the respective class of shares is contractually or under the articles of association according to the profit distribution rules.

Consideration of dilution effects

If there are exercisable stock options (for new shares) or convertible bonds , the diluted earnings per share must also be shown, taking into account the possible capital increases when the option is exercised. The so-called treasury stock method is used here; The total number of shares is adjusted by the in-the-money options (i.e. the maximum number of shares that are theoretically issued when the options are exercised, regardless of the possible exercise period) minus the number of shares that were acquired at the current market price with the issue money can be.

Numerical example

• There are 100 shares outstanding; in addition, 10 options entitle the holder to purchase shares at a price of € 5; the current share price is € 10.
• The options are in the money because the issue price is lower than the current market price (€ 5 <€ 10). If the options are exercised, a maximum of 10 shares will be issued with a cash inflow for the company of € 50 (10 × € 5). At the current price, the company could buy 5 shares. The diluted number of shares in the denominator is therefore 105 (100 + 10 - 5)
• With a profit of € 20, earnings per share are € 0.20 and diluted earnings per share are € 0.19

See also

• Price / earnings ratio
• List of International Financial Reporting Standards
• Return

Individual evidence

1. ↑ Hilmar Vollmuth / Robert Zwettler, key figures , Planegg / Munich 2008, p. 95, ISBN 978-3-448-09092-5
2. ↑ Horst-Tilo Beyer, Finanzlexikon , 1971, p. 158