Simplified Earnings Per Share

Earnings per share (EPS) is an important measure of performance of an entity for the users of financial statements. Because of the employment of various dilutive securities by an enterprise, computation of EPS is very complicated. In many occasions, users of financial statements are confused about the computation. For this reason, simplified computation of EPS is needed. The purpose of this study is to find the simplified computation of EPS based on the assumption that it will be easy to understand and useful for decision making to the users of financial statements. The existing methods of computation of EPS, required by APBO-15, SFAS-55 and 85, are examined. Common stock equivalency which above all makes EPS computation complicated will be examined by evaluating empirical evidence