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Earnings Per Share

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(Querist)
18 August 2008 In a financial organization the EPS has been caclculated as
Net profit available to equity shareholders/No. of ordinary shares outstanding

The organization is considering Net profit available to equity shareholders before distributing Preference dividend,Interest and Income Tax......now they are distributing the same as dividend after deducting preference dividend and interest from the above said profit to the equity holders ....

is this procedure correct???

please also tell me what could be the intention of that organization in doing so???
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S.Srinivasaraghavan

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S.Srinivasaraghavan (Expert)
18 August 2008 I do not understand your query.

The EPS is calculated On the basis of profit after tax and preference dividend.
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Anuraag Sharma

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Anuraag Sharma (Querist)
19 August 2008 but the organization is calculating it on the basis of without deducting Tax and preference dividend from EBIT..
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S.Srinivasaraghavan

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S.Srinivasaraghavan (Expert)
14 October 2008 This is wrong.
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