EPS can rise without higher profit. A per-share result requires a record of the denominator as well as the earnings. This workbook connects the income statement, the EPS note and movements in shares outstanding.
Official references checked: . The figures below are independently constructed fictional cases, not results of the linked companies.
1. Fix the numerator and units
Profit attributable to ordinary shareholders need not equal total group net income. Copy the numerator actually used in the EPS note and identify any preferred-share deductions or other adjustments. The IAS 33 overview describes the reconciliations for basic and diluted EPS. Our fictional company has ordinary-share earnings of 120 with no preferred-share or convertible-debt adjustment. Amounts and shares are both in millions, leaving a currency amount per share after division.
2. Weight shares over the period
Assume 100 shares were outstanding for the first half and 80 for an equally long second half. The weighted average is 100 × 0.5 + 80 × 0.5 = 90. Basic EPS is 120 / 90 = 1.3333. Using only the ending count produces 1.5, an overstatement. For an actual filing, inspect the time weights from issue and repurchase dates and check whether a share count includes treasury shares.
| Item | Basic | Diluted |
|---|---|---|
| Ordinary-share earnings | 120 | 120 |
| Weighted-average ordinary shares | 90 | 90 |
| Incremental dilutive shares | — | +6 |
| Denominator used | 90 | 96 |
| Earnings per share | 1.3333 | 1.25 |
3. Use the calculated dilution adjustment
The additional six shares are an assumed, already-calculated dilution adjustment for this period. They are not all outstanding options or all unvested awards. Conversion of debt can also require a numerator adjustment for interest and related effects. Trace basic shares to incremental shares and then to diluted shares, and record whether the earnings numerator changes.
4. Check the direction in a loss case
With a continuing-operations loss attributable to ordinary shareholders of −18 and no other adjustments, basic EPS is −18 / 90 = −0.20. Adding six shares gives −18 / 96 = −0.1875, reducing the loss per share. Those shares are antidilutive in this simple case and are excluded. Do not infer that every net loss excludes every potential share. Check the continuing-operations control figure and the issuer’s explanation.
5. Recompute annual EPS from annual inputs
If each half earns 60, their respective EPS figures are 0.60 and 0.75. Their sum, 1.35, differs from annual EPS of 120 / 90 = 1.3333 because the denominators changed. When working from interim reports, return to annual earnings and annual weighted shares rather than adding the reported EPS amounts. After a split, also check whether comparative counts were restated.
6. Keep five fields beside the source
| Record | Where to look |
|---|---|
| Period and earnings/share units | Statement header and EPS note |
| Ordinary-share earnings adjustments | Numerator reconciliation |
| Basic-to-diluted shares | Denominator reconciliation |
| Excluded potential shares and reasons | Antidilution explanation |
| Subsequent issues and splits | Subsequent-events and equity notes |
Note 3 of Apple’s 2025 10-K illustrates where a computation table sits in a real filing. Its figures are separate from our example. In a Korean issuer’s annual report, locate the corresponding earnings-per-share note and record the same fields.
7. Separate arithmetic from the business conclusion
A matching EPS calculation does not establish cash conversion, the economic cost of share awards or whether a repurchase made sense. Divide an EPS change into earnings and share-count effects, then use the buyback and ROE worksheet. For company-defined adjusted EPS, check the earnings numerator in the adjusted-earnings reconciliation too.