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EARNINGS PER SHARE
Introduction
• Earnings per share (EPS) is a ratio widely used to
measure the performance of a company.
• EPS is also used to calculate earnings yields (EY) and
price earnings ratios (PE) that are used by investors
and financial analysts to measure companies’
performances
• Diluted earnings per share assists the users of
financial statements in evaluating the sensitivity of
EPS with regard to future changes in the capital
structure of the company.
• Headline earnings per share is required by the JSE
Listings Requirements (and not by IFRS) and must be
calculated in terms of Circular 02/13 Headline
Earnings, issued by SAICA.
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