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I have started teaching myself basic business stuff and have a question regarding calculating earnings per share.

Q:
[bunch of numbers for revenue, expenses...]

At the beginning of year: 80,000 shares outstanding.
In June, 20,000 shares sold for $8/share.

What is the EPS?

I understand EPS = net income / time average of total shares outstanding.

However I have two questions:
1. Is the money from the shares sold added to net income?
2. Is the total number of shares after the sale of shares 100,000?

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This question is off topic, see the faq – Bob Jansen May 15 '12 at 5:03
Should be moved to Personal Finance & Money. – SRKX♦ May 15 '12 at 6:32

closed as off topic by Quant Guy, Bob Jansen, Derek Ploor, SRKX♦, Alexey Kalmykov May 15 '12 at 7:02

Questions on Quantitative Finance Stack Exchange are expected to relate to quantitative finance within the scope defined in the FAQ. Consider editing the question or leaving comments for improvement if you believe the question can be reworded to fit within the scope. Read more about closed questions here.

1 Answer

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It is off topic. The answer is

1) no

2) yes but the weighted average number of shares for EPS calculation is $100000 + \frac{1}{2} 20000= 110000$. See my blog post on EPS computations.

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