Tay Gim Seng asked 11 months ago
Hi Victor, i read your answers to a few previous questions on stock split but i am still not sure. I am analysing Nvidia shares now. They did a stock split of 4 to 1 in year 2022. Number of shares increase from 628million (2021) to 2535million (2022). I am calculating the Earning per share (EPS) using your financial analysis excelsheet. So what should i adjust? Do i multiply by 4 the number of shares from all the years from 2021 and before? This will reduce the EPS by a quarter for all these years, is it correct? I will then use the last 10 years EPS to calculate the P/E for the valuation analysis.
Victor Chng Staff answered 11 months ago
Hi Gim Seng,
Yes, you have to adjust the shares from 2021 and before.
AR2021 - https://s201.q4cdn.com/141608511/files/doc_financials/2021/q4/0ec16816-55e2-4812-8f77-75cab5909247.pdf
Go to page 47; you can see that 2021 basic shares are 617 and diluted shares are 628. You need to adjust by multiplying by 4.
The EPS was reduced because of the increasing outstanding shares, but there is no dilution. It is still the same.
Tay Gim Seng
replied 11 months ago got it, thanks.
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