PDSnet Glossary

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Definition

<p style="text-align: justify;">A per <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">share</span> <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">ratio</span> which uses the number of <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">issued shares</span> at the end of the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">accounting period</span>. Typically a <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">listed</span> <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">company</span> will issue additional <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">shares</span> during the year for a variety of reasons. They may make an <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">acquisition</span> and pay for it fully or partially by issuing additional shares. They may have an <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">employee share option scheme</span> which requires them to issue additional shares to staff members. They may conduct a <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">rights issue</span> or a <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">public offer</span> to raise <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">capital</span>. If any of these events occurs during the year, it is will increase the number of shares in issue at a certain point during the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">financial period</span>. Since the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">earnings</span> and <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">dividends</span> are produced over the whole year, the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">earnings per share</span> (EPS) and <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">dividends per share</span> (DPS) ratios use the <span class="glossary" style="border-bottom: 1px dotted black; cursor: pointer;">average</span> number of shares in issue during the whole year. To be conservative, most companies also provide a fully diluted figure for these ratios using the higher number of shares in issue, at year-end.</p>