article: P/E Ratio Unplugged

#14
How to determine Cash EPS

I don't know if this is the right place to put this problem. I couldn't find any threads that discuss finance problems and concepts as such. Please take the effort to answer the following question

I am trying to determine value of companys shares using the Earnings Per Share (P/E) I dont understand what EPS to consider while arriving at the fair price of the share. Is it headline EPS, adjusted EPS, pro-forma EPS or any other EPS.

Adding to this problem is that I dont understand how to determine the OCF per EPS firm the balance sheet of the company because the formats are so different.

The formulae for OCF is PBIT - Taxes + Dep

Now, the problem is that PBIT is never directly given. There are several items like non recurring income etc to be adjusted. How do I make the necessary adjustments.

Besides, how do I verify the Cash EPS that I have determined?

Can anyone answer these querries with an example from a real PL statement.

Thanks in advance.

Vipin
 

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