Can you explain the term "split factor adjustment"?

Q: Can you explain the term "split factor adjustment"? The example is for Ecolab shares. If 100 shares were bought in 1995 with $US (14 Sept 1995),what would they be worth today? The Ecolab home page says that in Sept 1995 the shares were worth $13.875 with a split factor of 2:1. When I last looked they were worth $44.37 with a split factor adjustment of 1:1.

A: Companies often 'split' their shares. On a certain date they may divide every 1 share you have into 2 (or more - whatever the board decides). At some time in the past few years it appears Ecolab have had a share split. When they are quoting different share prices it is on a pre-split basis ie if the shares hadn't been split they would be worth 'x' rather than the 'y' they are worth now.

     

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