Earning Per Share for Newly Incorporate Company


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Quick Summary
For a newly incorporated company, the number of shares to use when calculating Earnings Per Share (EPS) is the total number of shares issued. In this case, with 10,000 shares issued on 05/05/2023, the correct figure for EPS calculation is 10,000 shares, not a pro-rated amount based on the number of days in the financial year.

26 October 2023 Company incorporated on 05/05/2023
No of Shares = 10,000

To compute EPS, no of shares should be
a) 10,000
b) 10000*331/365 = 9044

27 October 2023 It's a) 10,000 shares.

02 November 2023 Thank you sir


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