Earnings Per Share (_)

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1、EarningsperShareThemostcloselywatchedstatisticonWallStreet
Earningspershare(EPS)isanimportantindicatorofthesuccessorfailureofacompany.SeveralcomponentsofEPSmustbedisclosediftherearediscontinuedoperations,extraordinaryitems,orcumulativeeffectsofchangesinaccountingprinciples.Ear

2、ningsPerShare:Continuingoperations$3.15Discontinuedoperations.67Extraordinaryloss(.15)Cumulativeeffectofaccountingchange.17NetEarningsPerShare$3.84TheremaybetwoEPSnumbersforeachitem:BasicDilutedReflectstheConsidersonlymaximumpotentialcommonsharesdilutionfromalloutstandingpossi

3、blestockconversionsthatwouldhavedecreasedEPS.Dilutedearningspershare
Iliketothinkofitasthe‘worstcasescenario’
Itisthelowestpossiblenumberwe’dreportforEPS
Itisa“proforma”number,nota“fact”Capitalstructuredeterminesreporting
Manycompanieswillreportbasicearningspershareonly
Otherc

4、ompaniesmustreportBOTHbasicanddilutedearningspershare
Itdependsonwhetherthecapitalstructureis–Simple,or–ComplexAsimplecapitalstructureconsistsofonlycommonstock.ThecorporationhasonlycommonandCommonnonconvertibleStockpreferredstockandhasnoconvertiblesecurities,stockoptions,warra

5、nts,orotherrightsoutstanding.CapitalStructuresComplexCapitalStructureComplexCapitalStructure:The:Thecorporationhasoneormorecorporationhasoneormoreinstrumentsoutstandingthatcouldinstrumentsoutstandingthatcouldresultinissuanceofadditionalresultinissuanceofadditionalcommonshares.

6、commonshares.ConvertiblePreferredConvertibleBondsStockOptionsCapitalStructuresTherefore,acompanyTherefore,acompanywithpotentialpersharewithpotentialpersharedilutionisconsideredtodilutionisconsideredtohaveacomplexcapitalhaveacomplexcapitalstructure.structure.Notethatapotentiall

7、ydilutivesecuritydoesnotnecessarilydiluteEPSDilutionofEarnings
DilutiveSecurities:Securitieswhoseassumedexerciseorconversionresultsinareductioninearningspershare.
AntidilutiveSecurities:Securitieswhoseassumedconversionorexerciseresultsinanincreaseinearningspershare.BasicEarnin

8、gsPerShareNetIncome-PreferredDividendsWeightedaveragenumberof