Earnings per Share: Basic & Diluted EPS, Weighted Shares, Splits & Convertibles

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Time-weight Velmora Holdings' share issues and buyback by month to find the weighted average number of ordinary shares for FY2026, and cross-check it with a second method.
• Apply Velmora's 1-for-2 bonus issue retroactively: adjustment factor, bonus shares, restated weighted shares for both years and the restated comparative EPS.
• Work out the profit that belongs to Velmora's ordinary shareholders: remove the non-controlling interests, deduct the right preference dividends and calculate basic EPS.
• Apply the treasury stock method to Velmora's options and warrants, exclude the out-of-the-money warrants, time-weight the options granted mid-year and calculate diluted EPS.
• Apply the if-converted method to Velmora's convertible bonds: new shares, after-tax interest add-back, earnings per incremental share and the effect on diluted EPS.
• Apply the if-converted method to Velmora's two convertible preference classes: shares on conversion, earnings per incremental share, a first test against basic EPS and EPS with both converted.
• Rank Velmora's four potential ordinary shares from most to least dilutive, add them step by step, stop at the first antidilutive one and read off diluted EPS.
• Build Velmora's five-year EPS table (basic, diluted, dilution), calculate the compound annual growth of basic EPS and chart basic vs diluted EPS.