Diluted earnings per share Diluted earnings per share shows the earnings per share after including all potential common shares that would reduce earnings per share
Diluted Earnings Per Share Diluted earnings per share shows the earnings per share after including all potential common shares that would reduce earnings per share. Intermediate Accounting 14 Earnings Per Share And Retained Earnings
Diluted earnings per share To be included in the diluted earnings per share calculation, any potential common share must have a dilutive effect on earnings per share
To be included in the diluted earnings per share calculation, any potential common share must have a dilutive effect on earnings per share. Intermediate Accounting 14 Earnings Per Share And Retained Earnings Diluted Earnings Per Share
Diluted earnings per share Step 1 Compute the basic earnings per share Step 2: Include dilutive stock options and warrants and compute a tentative dePs Step 3: Develop a ranking of the impact of each convertible preferred stock and convertible bond on deps Step 4: Include each dilutive convertible security in DEPS in a sequential order based on the ranking and compute a new tentative dEPs Step 5: Select as the diluted earnings per share the lowest computed DEPS
Step 1: Compute the basic earnings per share. Step 2: Include dilutive stock options and warrants and compute a tentative DEPS. Step 3: Develop a ranking of the impact of each convertible preferred stock and convertible bond on DEPS. Step 4: Include each dilutive convertible security in DEPS in a sequential order based on the ranking and compute a new tentative DEPS. Step 5: Select as the diluted earnings per share the lowest computed DEPS. Intermediate Accounting 14 Earnings Per Share And Retained Earnings Diluted Earnings Per Share
Flowchart ofEP computations Capital Structures any options warrants or convertible securities outstanding es Simple capital Structure Complex Capital Structure Basic eps Go to next slide Net Income-Preferred Dividends Weighted Average Common Shares
Net Income - Preferred Dividends Weighted Average Common Shares Flowchart of EPS Computations Capital Structures Simple Capital Structure No Any options, warrants, or convertible securities outstanding? Complex Capital Structure Yes Basic EPS Go to next slide Intermediate Accounting 14 Earnings Per Share And Retained Earnings
Complex Capital Structure Diluted ePs Basic Net Income -Preferred Dividends EPs Weighted Average common Shares Stock Options Convertible and Warrants Securities Average Market Price Option price? No Continued Yes. go to next slide next slide
Continued next slide Stock Options and Warrants Convertible Securities Diluted EPS Complex Capital Structure Basic Net Income - Preferred Dividends EPS Weighted Average Common Shares = Average Market Price > Option Price ? Yes, go to next slide No Intermediate Accounting 14 Earnings Per Share And Retained Earnings