I am making a financial model of Tech Mahindra. This company was earlier called Satyam and ran into a huge scam and later acquired and changed into Tech Mahindra. Now the problems are endless. Every Annual Report the final figures are changed a little. Different year EPS is provided in different ways. Sometimes it's just Basic n Diluted EPS and sometimes EPS before exceptional items Basic n Diluted and EPS after exceptional items Basic n Diluted. Which am I supposed to consider?

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anonymous · Answer

did u find any ans for this?

anonymous · Answer

no..  i have not started my project actively. once m totally on it.. more doubts n questions will b posted

anonymous · Answer

There is a no clear cut answer to this as this is highly subjective. Since you 4 sets of figures, if the exceptional items are appearing only in one year, you can take an assumption that it will not occur in future and state the assumptions in your report. Once you do this you have only two variables - basic and diluted EPS to analyze, which is easier. 
However, if due to some reasons someone wants to see the impact of exceptional items you can go ahead and do a separate analysis of exceptional items too. Its not very difficult if you split the analysis in to two different parts and analyze accordingly. This way you can provide two sets of points - one based on normal basic and diluted EPS and the other analysis based on EPS after exceptional items. 
Can you share the findings of the report (leaving out any confidential info)? This will be a good eye opener and good case for other learners like me to understand.

anonymous · Answer

i have postponed my project to next month.. will surely share it if you wanna know. let me point out one issue for now.. is that EPS aftr exceptional item is for some years and for some years it i Basic and Diluted. There is no flow.

anonymous · Answer

I'm not able to understand the above question, but remember that exceptional items occur in specific years only. So its not surprising if exceptional item does not exist for many years. These are exceptional (one-off) transactions. It may not be fair to write off exceptional items in one year, because the benefit of such expense/investment may accrue over multiple years (say like acquisition of a company, plant/machinery, etc)