Pure mathematical calculation process? Earnings per share analysis method analyzes the relationship between earnings per share and capital structure, and finds the difference of earnings per share. There is no difference in earnings per share, and earnings per share are equal whether debt or equity financing scheme is adopted.

The formula is listed:

Scheme 1 issues 2 million ordinary shares, and the earnings per share are: (EBIT- debt interest 1- enterprise income tax)/number of shares 1.

The second scheme is that the bank borrows 2 million yuan, and the earnings per share is: (EBIT- debt interest 2- enterprise income tax)/number of shares 2.

Now, when the earnings per share of the two schemes are equal, calculate EBIT. It is estimated that the current common share capital of the enterprise is 5 million shares, the interest on existing debts is 240,000, and the corporate income tax rate is 25%. For example, if the bank borrows money, the annual interest on the new debt is 65,438+060,000 (200x8%):

(EBIT-24)X( 1-25%)/(500+200)=(EBIT-24- 16)X( 1-25%)/500

Divided by both sides (1-25%):

(EBIT-24)/700=(EBIT-40)/500

500 times (EBIT-24)= 700 times (EBIT-40)

500 x EBIT-500 x24 = 700 x EBIT-700 x40

200X EBIT=700X40-500X24

EBIT= 16000/200

Earnings before interest and tax = 800,000 yuan.

In other words, BEIT is 800,000 yuan, which has nothing to do with the earnings per share of the two financing schemes. At this point, the earnings per share of the two schemes are equal.

Personal opinion, for reference only.