CUET UG 2025 — Accountancy Financial Statements

Earnings Per Share (EPS) represents the profit available to each equity share.

The formula is:

$$EPS = \frac{\text{Profit available to Equity Shareholders}}{\text{Number of Equity Shares}}$$EPS=Number of Equity SharesProfit available to Equity Shareholders​

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Number of Equity Shares:

$$\text{Number of Equity Shares} = \frac{\text{Equity Share Capital}}{\text{Face Value per share}} = \frac{4,00,000}{10} = 40,000 \text{ shares}$$Number of Equity Shares=Face Value per shareEquity Share Capital​=104,00,000​=40,000 shares

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Profit available to Equity Shareholders:

From the net profit after tax, preference dividend must be deducted since preference shareholders have the first claim on profits.

$$\text{Preference Dividend} = 12\% \text{ of } 1,00,000 = 12,000$$Preference Dividend=12% of 1,00,000=12,000

$$\text{Profit available to Equity Shareholders} = 1,50,000 - 12,000 = 1,38,000$$Profit available to Equity Shareholders=1,50,000−12,000=1,38,000

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Calculating EPS:

$$EPS = \frac{1,38,000}{40,000} = 3.45$$EPS=40,0001,38,000​=3.45

The key point here is that preference shareholders receive their fixed dividend first (12% of Rs. 1,00,000 = Rs. 12,000), and only the remaining profit is distributed among equity shareholders.

Correct Option: 2 (3.45)