nympho69 Posted April 22 Report Share Posted April 22 Does anyone know how to compute diluted Earnings? Quote Link to comment Share on other sites More sharing options...
muzikchick Posted April 22 Report Share Posted April 22 i'm lucky i can work a calulater...i still add wif my fingers....but, i think my sis can do that....but, she charges alot. Quote Link to comment Share on other sites More sharing options...
kitty19 Posted April 22 Report Share Posted April 22 you need to take the net income (before extraordinary gains/losses, i assume) and divide it by the number of diluted shares outstanding.diluted shares is taking the number of common shares outstanding and "cleaning it out" of stock options, etc via the treasury stock method. you can get the information for the stock options in the management and discussion analysis portion of a financial statement from a company (10K). based on the strike prices being either "in/out of the money" is how you get to the number of shares that should be cleaned out of the common shares outstanding.why in the world do you need to know this? Quote Link to comment Share on other sites More sharing options...
nympho69 Posted April 22 Author Report Share Posted April 22 Originally posted by kitty19 you need to take the net income (before extraordinary gains/losses, i assume) and divide it by the number of diluted shares outstanding.diluted shares is taking the number of common shares outstanding and "cleaning it out" of stock options, etc via the treasury stock method. you can get the information for the stock options in the management and discussion analysis portion of a financial statement from a company (10K). based on the strike prices being either "in/out of the money" is how you get to the number of shares that should be cleaned out of the common shares outstanding.why in the world do you need to know this? Because I had a commercial banking exam today. I think I figured it out during the exam actually. I know diluted earnings per share was converting the prefered into common but I wasnt sure what to do next. I figured out the number of convertible shares and then added that to the number of shares of c.s. and then divided net income for c.s. by the new number of shares. Well I think thats right?? Oh well the exam is over Quote Link to comment Share on other sites More sharing options...
kitty19 Posted April 22 Report Share Posted April 22 i see. hope you did well.i didn't study finance in school, so i guess my definition is the "real world" application of it - that's how it's done in investment banking.anyway, good luck to you! Quote Link to comment Share on other sites More sharing options...
bigpoppanils Posted April 22 Report Share Posted April 22 Originally posted by nympho69 Because I had a commercial banking exam today. I think I figured it out during the exam actually. I know diluted earnings per share was converting the prefered into common but I wasnt sure what to do next. I figured out the number of convertible shares and then added that to the number of shares of c.s. and then divided net income for c.s. by the new number of shares. Well I think thats right?? Oh well the exam is over that seems to be right......only if the new number of shares was greater than the old one (which since you are only dealing with preferred stock that is highly unlikely) Quote Link to comment Share on other sites More sharing options...
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