Page 29 - PowerPoint Presentation

EARNINGS PER SHARE

Diluted earnings per share

• The effects of potential anti-dilutive ordinary shares are

ignored in calculating diluted earnings per share. The

reason for this is that the objective is to determine the

maximum possible dilution; if the increase in earnings

per share is included, then an average dilution will be

determined.

• The sequence in which potential ordinary shares are

considered may affect whether or not they are dilutive.

• In order to maximise the dilution of basic earnings per

share, each issue or series of issues of potential

ordinary shares must be considered in sequence. This

will result in the most dilutive effect.

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