5 Questions
0 Views

# Earnings Per Share (EPS) Calculation Quiz

Created by
@SpiritedElbaite

### When calculating the earnings per share (EPS), what should be deducted from the number of ordinary shares outstanding?

• Preferred shares
• Treasury shares (correct)
• Shares held by stockholders
• New shares issued
• ### What do treasury shares refer to?

• New shares issued by the company
• Shares held by stockholders
• Previously outstanding stock bought back by the issuing company (correct)
• Preferred shares
• ### What is excluded in the calculation of earnings per share (EPS)?

• Shares held by stockholders
• Preferred shares
• Treasury shares (correct)
• New shares issued
• ### In the given example, what is the profit attributable to ordinary shareholders for the year?

<p>Rs.25,000</p> Signup and view all the answers

### What happens to the total number of outstanding shares on the open market when treasury shares are bought back?

<p>It decreases</p> Signup and view all the answers

## Study Notes

### Earnings Per Share (EPS) Calculation

• In calculating EPS, treasury shares are deducted from the number of ordinary shares outstanding.
• Treasury shares refer to the portion of shares that were repurchased by the company and are held in its own treasury, not available for dividends or voting.
• Exclusions in EPS calculation include dividends on preferred shares, which are deducted from net income before calculating EPS for ordinary shareholders.

### Profit Attributable to Ordinary Shareholders

• The profit attributable to ordinary shareholders for the year is the net income minus any preferred dividends, which results in the earnings available for common stockholders.

### Impact of Treasury Shares on Outstanding Shares

• When a company buys back treasury shares, the total number of outstanding shares in the open market decreases, as those shares are no longer considered part of the circulating shares available to investors.

## Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

## Description

Test your knowledge on calculating earnings per share (EPS), treasury shares, and the factors excluded in the EPS calculation. Determine the profit attributable to ordinary shareholders and understand the impact of buying back treasury shares on the total number of outstanding shares.

## More Quizzes Like This

3 questions
18 questions
Use Quizgecko on...
Browser
Information:
Success:
Error: