The following information relates to Simrin pic for the year ended 3 I December 20X0: Simrin pic
Question:
The following information relates to Simrin pic for the year ended 3 I December 20X0:
Simrin pic had 100,000 ordinary shares of £1 each in issue throughout the year, Simrin pic has in issue warrants entitling the holders to subscribe for a total of 50,000 shares in the company. The warrants may be exercised after 3 I December 20X5 at a price of £1.10 per share. The average fair value of shares was £1.28. The company had paid an ordinary dividend of £15,000 and a preference dividend of £9,000 on preference shares classified as equity.
Required:
(a) Calculate the basic EPS for Simrin pic for the year ended 31 December 20X0, in accordance with best accounting practice.
(b) Calculate the diluted EPS figure, to be disclosed in the statutory accounts of Simrin pic in respect of the year ended 3 I December 20X0.
(c) Briefly comment on the need to disclose a diluted EPS figure and on the relevance of this figure to the shareholders.
(d) In the past, the single most important indicator of financial performance has been earnings per share. In what way has the profession attempted to destroy any reliance on a single figure to measure and predict a company’s earnings, and how successful has this attempt been?
Step by Step Answer:
Financial Accounting And Reporting
ISBN: 9780273778172
16th Edition
Authors: Mr Barry Elliott, Jamie Elliott