Fundamental Glossary / Earnings & Accounting Concepts
Basic Earnings
Profit attributable to ordinary shareholders, before considering dilution from options and convertibles.
Formula
PAT attributable to owners, minus preferred dividends if any. This is the numerator of basic EPS.
What it means
Basic earnings are the profit that belongs to shares already in issue. They do not add back interest saved on a convertible, and they do not pretend new shares exist.
The word "basic" matches basic EPS. The total and the per-share figure should be consistent.
How to read it
Use basic earnings to see what the current owners earned. Switch to diluted earnings before you value the share on a fully diluted count.
What to watch
Minority interest has to be removed if you are looking at the parent's shareholders. Consolidated profit including minorities is not all theirs.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.