The Number of Shares Used in the Calculation of Earnings

question 12

Multiple Choice

The number of shares used in the calculation of earnings per share is:

• A) the average of the number of ordinary shares outstanding at the beginning and end of the reporting period.
• B) the number of preference shares adjusted by a time-weighting factor which is the number of days in the reporting period that the shares are outstanding as a proportion of the total number of days in the period.
• C) the number of ordinary and preference shares adjusted by a time-weighting factor which is the number of days in the reporting period that the shares are outstanding as a proportion of the total number of days in the period.
• D) the number of ordinary shares adjusted by a time-weighting factor which is the number of days in the reporting period that the shares are outstanding as a proportion of the total number of days in the period.

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Definitions:

Lead Time

The timeframe between the initiation and completion of a process, such as from placing an order to its delivery.

Re-Order Point

The inventory level at which an order should be placed to replenish stock before it runs out, based on lead time and consumption rate.

Demand

The quantity of a product or service that consumers are willing and able to purchase at various prices at a given time.

Optimal Order Size

The quantity that minimizes the total cost of inventory, including holding and ordering costs.