annualized eps calculation

ndnk · 1 annualized eps calculation Sat Mar 05, 2011 11:03 am

ndnk

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when the annual report gives an eps, do we need to find an annualized eps again for valuations?

Slstock · 2 Re: annualized eps calculation Sun Mar 06, 2011 10:57 am

Slstock

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ndnk wrote:when the annual report gives an eps, do we need to find an annualized eps again for valuations?

There are many ways to find annulized EPS

a) when all the quarter values are known for a company add q1+q2+q3+q4 EPS = annual EPS in that year. So The annual report will have annualzied EPS for the company for the year under review. So you do not need to calculate it again for that year.

But the issue is when you know only 1 or 2 or 3 Quarters EPS in that year so far ( not the whole 4)
in that case you can do various things

For Ex : Q1 Eps 0.5 , Q2 Eps 1 ,Q3 Eps 1.5

option a)
( 0.5+1+1.5 )*4/3 =4 EPS annualized ( this called forward EPS as we are averaging

option b) 0.5+1+1.5 and then add the EPs for Q4 from lat year to complete 4 quarter.

Variuosu people use these methods to calcualte forward EPS

hope this helps to answer the question you asked.

Monster · 3 Re: annualized eps calculation Sun Mar 06, 2011 1:53 pm

Monster

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slstock wrote:

ndnk wrote:when the annual report gives an eps, do we need to find an annualized eps again for valuations?

There are many ways to find annulized EPS

a) when all the quarter values are known for a company add q1+q2+q3+q4 EPS = annual EPS in that year. So The annual report will have annualzied EPS for the company for the year under review. So you do not need to calculate it again for that year.

But the issue is when you know only 1 or 2 or 3 Quarters EPS in that year so far ( not the whole 4)
in that case you can do various things

For Ex : Q1 Eps 0.5 , Q2 Eps 1 ,Q3 Eps 1.5

option a)
( 0.5+1+1.5 )*4/3 =4 EPS annualized ( this called forward EPS as we are averaging

option b) 0.5+1+1.5 and then add the EPs for Q4 from lat year to complete 4 quarter.

Variuosu people use these methods to calcualte forward EPS

hope this helps to answer the question you asked.

Good explanation slstock Smile

Additionally, you should check whether company has went on any share split, bonus issue, right issue etc during the period when you are calculation annual EPS. So you have to divide the EPS based on no of share split, right issue, bonus etc.

zoozzoo · 4 Re: annualized eps calculation Thu Nov 27, 2014 7:36 pm

zoozzoo

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Slequity wrote:

ndnk wrote:when the annual report gives an eps, do we need to find an annualized eps again for valuations?

There are many ways to find annulized EPS

a) when all the quarter values are known for a company add q1+q2+q3+q4 EPS = annual EPS in that year. So The annual report will have annualzied EPS for the company for the year under review. So you do not need to calculate it again for that year.

But the issue is when you know only 1 or 2 or 3 Quarters EPS in that year so far ( not the whole 4)
in that case you can do various things

For Ex : Q1 Eps 0.5 , Q2 Eps 1 ,Q3 Eps 1.5

option a)
( 0.5+1+1.5 )*4/3 =4 EPS annualized ( this called forward EPS as we are averaging

option b) 0.5+1+1.5 and then add the EPs for Q4 from lat year to complete 4 quarter.

Variuosu people use these methods to calcualte forward EPS

hope this helps to answer the question you asked.

really helpful for me Smile

glad · 5 Re: annualized eps calculation Fri Nov 28, 2014 6:35 am

glad

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Slequity wrote:

ndnk wrote:when the annual report gives an eps, do we need to find an annualized eps again for valuations?

There are many ways to find annulized EPS

a) when all the quarter values are known for a company add q1+q2+q3+q4 EPS = annual EPS in that year. So The annual report will have annualzied EPS for the company for the year under review. So you do not need to calculate it again for that year.

But the issue is when you know only 1 or 2 or 3 Quarters EPS in that year so far ( not the whole 4)
in that case you can do various things

For Ex : Q1 Eps 0.5 , Q2 Eps 1 ,Q3 Eps 1.5

option a)
( 0.5+1+1.5 )*4/3 =4 EPS annualized ( this called forward EPS as we are averaging

option b) 0.5+1+1.5 and then add the EPs for Q4 from lat year to complete 4 quarter.

Variuosu people use these methods to calcualte forward EPS

hope this helps to answer the question you asked.

If it is a seasonal ( varies for different periods) then what if we add the last years 4th qtr to this years 3. If you observe the Insurance shares their 4th qtr has more often been more than the other qtrs.
Just a thought.