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IFRS For Dummies by Steven Collings

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Chapter 16

Easing into Earnings per Share

In This Chapter

arrow Understanding the key calculations

arrow Rifling through rights issues

arrow Dishing out bonus issues

arrow Diluting shares

arrow Dealing with disclosures

Earnings per share, the amount of a company’s profit that belongs to a single share, is probably one of the most important ratios that’s widely used by financial analysts, investors and other users of the financial statements to get an idea as to the profitability of a company, as well as to value a company’s shares. Earnings per share is such an important accounting ratio that an entire accounting standard exists on the very subject – IAS 33 Earnings per Share.

The reality is that in the world of IFRS, the earnings per share ratio is only really applicable to those companies that trade their shares on a stock market (for example, the London Stock Exchange) because such markets place a huge amount of emphasis on the earnings per share ratio.

Calculating Basic Earnings per Share

The way to calculate ...

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