adjusted and unadjusted values

[JAYCEEZY]

hello every body am a new member and i would be happy if some1 could tell me what adjusted and unadjusted share values on financial reports mean.
thanks

[hispy99]

Originally Posted by JAYCEEZY

hello every body am a new member and i would be happy if some1 could tell me what adjusted and unadjusted share values on financial reports mean.
thanks

Companies usually report adjusted numbers when shares outstanding has changed over time. For instance, if in 1999 a company has 100 shares outstanding and makes a PAT (profit after tax) of N100, then its EPS (earnings per share) is N1 calculated by dividing PAT by shares outstanding. Now let's assume that it is 2003 and the company now has 200 shares outstanding (as a result of a 1 for 1 bonus) and a PAT of N150, so it's EPS is now N0.75. If you compare the EPS in 1999 to 2003, it seems as if EPS has dropped from N1 to N0.75, but in reality, this drop is only because the denominator (shares outstanding) has increased.

However, PAT has actually grown by 50% from N100 to N150, so to make the EPS of 1999 and 2003 comparable, you need to "adjust" the EPS of 1999. You do this by using 200 shares (instead of 100) as the denominator and you get an "adjusted" EPS of N0.50 for 1999, which confirms the 50% growth in PAT (N0.75/N0.50). If you look at the financials of the company in 2003, it will be similar to this:

1999 2003
PAT N100 N150
EPS (adjusted) N0.50 N0.75
EPS (unadjusted) N1.00 N0.75


I hope this helps!