How is EPS calculated?

Earning per share i.e. EPS is a financial ratio, which divides net earnings available to shareholders by the average outstanding shares over a certain period of time. 

The EPS Ratio indicates a company’s ability to produce net profits for shareholders.

Formula to calculate EPS is:

How earning per share Ratio help investors?

This is the time when most of the listed companies are declaring and publishing their annual reports and market is reacting on these.

A careful analysis of the financial data of a company is most important when it comes to invest in shares or stock of a company so that true value of the share price can be guessed.

Investors looking for opportunity to invest reading and trying to understand the published Financial statements like Balance sheet, income statement and cash flow statements. These are easily available however examining these documents is very difficult if not impossible and it is very time consuming also. Then what is the way to analyze true value of the share price.

Generally financial ratios are the easiest way to know the company performance and these ratios are easily available now a day. You must know that how to interpret these ratios instead of knowing how to calculate and which ratio explain what.

Market ratios like earning per share, price earnings ratio, dividend payout ratio, dividend per share, book value per share etc are the ratios which give insight and help in taking investment decision.

In this write up, we will discuss the earning per share ratio and would like to throw light on the questions:-

What is earning per share, how to calculate EPS, what is good EPS, how can EPS help investing opportunities? What EPS reveal? Why EPS is important to investors? Or how EPS is useful to investors?

EPS, or Earnings Per Share, is a financial metric that is commonly used by investors to evaluate the profitability of a company.

EPS is calculated by dividing a company's net income by the number of outstanding shares of its common stock.

Do you need to maintain books of accounts for Income Tax purpose ?

 Are you maintaining Books of accounts to disclose proper Income for Income Tax purpose?

you are filing your income tax return and declaring a certain amount as income , just think that you have received a notice from income tax department to prove your income, how will you prove that you have declared your true income? are you maintaining books of accounts and keeping record of the income and expenditure, if yes , very good but what if you are not maintaining,can Income tax department force you to maintain books of accounts or can department may penalize you for not keeping record? 

Just join me here to know what is required and what is not required , I am going to discuss the provisions relating to maintenance of books of Accounts.

Builder/developer failed to deliver peaceful possession liable for compensation and Interest

Builder/developer, entered into registered agreement with the complainant on 13-9-2012 for sale of flat of the project developed by him. No date of possession was mentioned in clause 50 of the said registered agreement. Complainant has paid the entire consideration except the amount required to be paid at the time of handing over possession. The opponent failed to deliver peaceful and vacant possession of the subject flat even though opponent were in position to obtain occupation certificate from competent authorities on 12-8-2013. Consumer complaint has been filed praying for handing over possession of the subject flat and claiming monetary relief of Rs. 30,90,817/- for the deficiency of service on the part of the opponent.

The Hon’ble State Consumers Disputes Redressal Commission observed and held that failure on the part of opponent resulted into consumer dispute and the complainant was unnecessarily dragged to knock the doors of the State Commission subjecting to mental agony for his no fault. Therefore, suitable compensation on account of the avoidable delay to hand over the possession would meet the ends of justice.

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Audit can be done by only Auditor- Delhi High court decision

The Delhi high court, in a leading judgement delivered on 3rd June, 2016, has declared service tax audit being conducted by Central Excise and Service tax department as ultra virus, in the matter of Mega Cabs Vs UOI. The matter was argued by Mr. J.K. Mittal, FCA as advocate of the petitioner.

The court held that audit is a specialized function and cannot be delegated to service tax department or Excise department. It has been a general practice of the service tax department to conduct Audit of Service tax assesses for the last 5 years by deputing own officers of the rank of inspectors and Superintendents. Service tax department also seeks voluminous details and seek information in self- specified formats/ annexures. Now this judgement made it clear that the officers of the department have no power to conduct Audit at all. The honorable High Court has also held that the CAG officers have no power to conduct audit of assessee's records.

Validate certificate under section-197

It is very common that deductor get certificate for lower deduction of TDS from the deductee. On the basis of such certificate, lower TDS is deducted and while filing TDS return, deductor mention the certificate number in return however demand of short deduction arises due to wrong quoting of 197 certificate number.

It happens because when the deductor accepts from deductee a manually issued lower deduction certificate by assessing officer & quotes the same in TDS statements. To resolve the issue CPC(TDS) has provided the facility of validating the 197 certificate to the deductors and that if the 197 certificate is not valid as per TRACES validation, the deductor should always insist upon an ITD system generated certificate having a unique 10 digit alpha numeric number. The entire procedure for this is explained in the advisory letter issued by CBDT.

Frequently Asked Questions (FAQ) on Electronic Funds Transfer (EFT) System

 Q.1.     What is RBI-EFT System? 

Ans     RBI EFT is a Scheme introduced by Reserve Bank of India (RBI) to help banks offering their customers money transfer service from account to account of any bank branch to any other bank branch in places where EFT services are offered.

Frequently Asked Questions (FAQ) on Electronic Clearing Service-(ECS)

Q.1.     What is Electronic Clearing Service (ECS)?

Ans     It is a mode of electronic funds transfer from one bank account to another bank account using the services of a Clearing House. This is normally for bulk transfers from one account to many accounts or vice-versa. This can be used both for making payments like distribution of dividend, interest, salary, pension, etc. by institutions or for collection of amounts for purposes such as payments to utility companies like telephone, electricity, or charges such as house tax, water tax, etc or for loan installments of financial institutions/banks or regular investments of persons.

Frequently Asked Questions (FAQ) on National Electronic Funds Transfer (NEFT) System

Q.1.     What is NEFT System?

Ans     National Electronic Funds Transfer (NEFT) system is a nation wide funds transfer system to facilitate transfer of funds from any bank branch to any other bank branch.

Q. 2.    Are all bank branches in the system part of the funds transfer network?

Ans  No. As on January 31, 2007, 18500 branches of 53 banks are participating. Steps are being taken to widen the coverage both in terms of banks and branches

What is RTGS & How it waor?-FAQ) on (RTGS) System

 Q.1      What is RTGS System?

Ans     The acronym “RTGS” stands for Real Time Gross Settlement. RTGS system is a funds transfer mechanism where transfer of money takes place from one bank to another on a “real time” and on “gross” basis. This is the fastest possible money transfer system through the banking channel. Settlement in “real time” means payment transaction is not subjected to any waiting period.

Calculation of Stock-Out Cost

In cost Accounting there are lot of methods followed to have better control to reduce the the cost without of hampering the quality of product/service.
In material management, functions like setting various level of stock , determine the pricing method of material to be issued and received and  fixation of accounting policy for recording of data etc etc are performed.

One single window for CS registration

With a view to provide efficient and any- time service to students , the Institute of Company Secretaries of India (ICSI), working under the aegis of the Ministry of Corporate Affairs, has moved to complete online registration for the Company Secretaryship (CS) Course w.e.f 1.1.2014. Now the Institute accepts only online registration to the CS course.

CS Course is the flagship programme of ICSI. A person completing this course, both examination and training, is enrolled as a Member and becomes eligible to work as a Company Secretary either in employment or in practice. To facilitate the students registering for the CS Course, the Institute has placed an animated help to do online registration which is available on www.icsi.edu.

Students even not registered for classes may contact for clarification of their doubts and all query will be answered in due course of time.

For Sending your query, you should follow following format so that answer can be given in minimum time:-

Labour Cost Control

Labour is another important element of cost and for overall cost control and cost reduction, of labour cost is of paramount importance. However, for control and reduction of labour cost, it is essential to compute the labour cost in a scientific manner and hence there should be proper systems of systems and processes and documentation, which will help computation of labour cost in a scientific manner.

Attention should also be paid to the productivity aspect. Low productivity results in higher labour cost per unit while higher productivity will reduce the labour cost per unit.

Various aspects of labour cost control

The following steps will be useful in controlling and reducing the labour cost.

Labour Turnover

            Labour Turnover

            It is the rate of change in the labour force during a specified period measured against a suitable index.  The standard or usual labour turnover in the industry or locally or the labour turnover rate for a past period may be taken as the index or normal against which actual turnover rate is compared.  The methods of calculating labour turnover are given below :

Indian Government Accounting Standard-3

The Government of India is empowered by clause (2) of the article 293 of the constitution to make loans to  as may be laid down by the law made by parliament, any such sums required for purpose of making loan shall be chargeable to the consolidated Fund of India.

In exercise of power conferred by Article 150 of the constitution, Government has issued an accounting standard on loan and advance made by government.

This Accounting standard deals with the norms for Recognition, Measurement, Valuation and Reporting in respect of Loans and Advances made by the Union and the State Governments in their respective Financial Statements to ensure complete, accurate, and uniform accounting practices, and to ensure adequate disclosure on Loans and Advances made by the Governments consistent with best international practices.

Full details of IGAS-3 can be read through Link below :- 

Indian Government Accounting Standard-3 (IGAS-3)

AMENDMENT IN COMPANIES (ACCOUNTING STANDARDS) RULES, 2006

NOTIFICATION NO. [F. NO. 17/133/2008-CL.V], DATED 11-5-2011

In exercise of the powers conferred by clause (a) of sub-section (1) of section 642 read with sub-section (1) of section 21A and sub-section (3C) of section 211 of the Companies Act, 1956 (1 of 1956), the Central Government in consultation with the National Advisory Committee on Accounting Standards, hereby makes the following amendment in the Companies (Accounting Standards) Rules, 2006, herein-after called the said rules namely :—