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What you will learn
- Check that intervals cover every model day exactly once.
- Calculate share days and the period-weighted share count.
- Use the same period’s supplied profit for simplified EPS.
Draw a model period with explicit boundaries
Plan around 25 minutes and draw 120 model days. Days 1–20 have 100 shares, days 21–80 have 150 and days 81–120 have 120. A share-count change applies from the new interval’s first day. The period is an explicit teaching measure rather than an actual calendar quarter. All 120 days must appear without a gap or overlap.
Profit attributable to ordinary shareholders is supplied as SEK 1,580 for these exact 120 days. There are no options, convertible instruments, bonus shares, splits or other events. The exercise practises a simplified basic calculation with directly specified quantities and times. It is neither a complete IAS 33 application nor an audit of company reporting.
If the table does not fit, scroll it sideways.
| Days | Share count | Share days |
|---|---|---|
| 1–20: 20 days | 100 | 2,000 |
| 21–80: 60 days | 150 | 9,000 |
| 81–120: 40 days | 120 | 4,800 |
| Total: 120 days | Period-weighted 131.67 | 15,800 |
Give each interval a separate calculation box
Share days are 100 × 20 = 2,000, 150 × 60 = 9,000 and 120 × 40 = 4,800. Their sum is 15,800. Divide by all 120 days: the period-weighted count is 131.666… shares, rounded to 131.67. Keep the unrounded value for the next calculation instead of losing precision at this step.
As a check, use the time weights 20 / 120, 60 / 120 and 40 / 120. They sum to one and produce the same count when each quantity is multiplied by its weight. A simple average of 100, 150 and 120 gives 123.33 because it incorrectly treats the intervals as equally long.
Keep the profit period and denominator together
Simplified EPS is 1,580 / (15,800 / 120) = SEK 12. Do not use a rounded denominator when an exact intermediate value is available. The closing count alone, 120, would give about 13.17, and the opening count alone, 100, would give 15.80. Those answers lose when the other shares existed within the period.
IFRS Foundation’s public IAS 33 overview describes period-weighted shares as part of the denominator. We apply that principle to our own simple cards. Actual reports may require more adjustments and separate diluted measures. Students should therefore label the answer simplified model EPS rather than assume that every reporting requirement has been checked.
Exchange timelines and find an interval error
Ask another group to inspect an incorrect version with the middle interval written as days 20–80. Day 20 would appear twice. Correct that evidence before division: accurate arithmetic using an incorrect day count still rests on wrong inputs. Assess both the sum of 120 days and the group’s explanation to another reader.
Finish with the two errors of using closing shares as the average and taking an unweighted mean of three quantities. Ask students to show which time weights are lost. Then connect to company search and the weighted-share lesson. The timeline is built manually and requires no historical share-count data or EPS calculator in Investiq.
Try it yourself
A new model period lasts 100 days: days 1–25 have 200 shares, days 26–75 have 300 and days 76–100 have 240. Supplied period profit is SEK 2,600. Calculate the period-weighted share count and simplified EPS.
Show the solution and explanation
The period-weighted count is 260 shares and simplified EPS is SEK 10. The intervals last 25, 50 and 25 days.
200 × 25 + 300 × 50 + 240 × 25 = 26,000 share days. 26,000 / 100 = 260; 2,600 / 260 = 10. Closing shares of 240 do not replace the period-weighted count.
Check your understanding
Why is an unweighted mean of the three main-case counts unsuitable?
The intervals last 20, 60 and 40 days, so their durations differ.
Should day 20 appear in both the first and second interval?
No. Every day must appear exactly once.
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Sources and examples
The sources support the factual explanations. Calculations and exercises were created for this lesson. Amounts and price changes are invented unless stated otherwise.
This material is educational and does not recommend securities to buy. A simulated result does not guarantee a future result.
