Calculation of Earning per share

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Nilang (Querist)

15 September 2010 Net profit as per profit and loss account Rs. 21,58,28,715
Out standing shares as on brgining of the year (i.e. on 01/04/2009) 23,77,25,547

Right share issued on 29/03/2010 3,00,00,000 @ Rs.10 per share

Fair value of the share immediate before right issue Rs.37.86

Kindly help me in calculating Basic as well as Diluted earning per share.

Thanks in advance

Nilang A Dalal

shakuntala chhangani

shakuntala chhangani (Expert)

24 September 2010 Hi Nilang, the answer to ur question is :
theoratical ex-right value per share =
(fair value from existing shares +proceeds from right issue)/ Total outstanding no.of shares after right issue
(23,77,25,547*37.86 + 3,00,00,000*10)/ (23,77,25,547 + 3,00,00,000)
(9000289209+30,00,00,000)/ 26,77,25,547
=9300289209 / 26,77,25,547
34.74 per share
Right factor = fair value per share before right issue / Theoratical ex-right value per share
= 37.86 / 34.74
= 1.089 or 1.10
EPS = 21,58,28,715 / (23,77,25,547 * 362/365days*1.089) + (3,00,000*3/365days)
EPS = 21,58,28,715 / 25,67,57,780
= 0.84 per share
there is no question of diluted EPS as there are no potential equity shares.
Regards, CA Shakuntala Chhangani

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