Financial Reporting
Earnings Per Share Explained: Calculating Basic and Diluted EPS With a £2m Profit and 500,000 Share Options
When an SME has outstanding share options, a single EPS figure does not tell the whole story. Using a £2m profit and 500,000 options as a worked example, this guide explains how basic and diluted EPS are calculated under IAS 33, why the treasury stock method matters, and what the dilution gap means for investors, lenders and buyers.