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    "WEEK 9" Part A: EPS (2019) Net Income Available For The Shareholders / Weighted Avg. Number of Stock

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    Yusef Shaqeel
    The document provides calculations for basic and diluted earnings per share (EPS) for a company in 2019 and 2018. For 2019: - Basic EPS is $1.15, calculated by dividing net income of $1,460,000 by the weighted average number of shares of 12,750,000. For 2018: - Basic EPS is restated to $1.3, calculated by dividing net income of $1,350,000 by the restated weighted average number of shares of 1,050,000. Diluted EPS is also calculated and considers all convertible securities that could increase the number of shares outstanding, such as stock options, resulting in a lower EPS value

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    "WEEK 9" Part A: EPS (2019) Net Income Available For The Shareholders / Weighted Avg. Number of Stock

    Uploaded by

    Yusef Shaqeel
    15 views3 pages
    The document provides calculations for basic and diluted earnings per share (EPS) for a company in 2019 and 2018. For 2019: - Basic EPS is $1.15, calculated by dividing net income of $1,460,000 by the weighted average number of shares of 12,750,000. For 2018: - Basic EPS is restated to $1.3, calculated by dividing net income of $1,350,000 by the restated weighted average number of shares of 1,050,000. Diluted EPS is also calculated and considers all convertible securities that could increase the number of shares outstanding, such as stock options, resulting in a lower EPS value

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    week 9

    Original Title

    WEEK 9_Acc

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    The document provides calculations for basic and diluted earnings per share (EPS) for a company in 2019 and 2018. For 2019: - Basic EPS is $1.15, calculated by dividing net income of $1,460,000 by the weighted average number of shares of 12,750,000. For 2018: - Basic EPS is restated to $1.3, calculated by dividing net income of $1,350,000 by the restated weighted average number of shares of 1,050,000. Diluted EPS is also calculated and considers all convertible securities that could increase the number of shares outstanding, such as stock options, resulting in a lower EPS value

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    15 views3 pages

    "WEEK 9" Part A: EPS (2019) Net Income Available For The Shareholders / Weighted Avg. Number of Stock

    Uploaded by

    Yusef Shaqeel
    The document provides calculations for basic and diluted earnings per share (EPS) for a company in 2019 and 2018. For 2019: - Basic EPS is $1.15, calculated by dividing net income of $1,460,000 by the weighted average number of shares of 12,750,000. For 2018: - Basic EPS is restated to $1.3, calculated by dividing net income of $1,350,000 by the restated weighted average number of shares of 1,050,000. Diluted EPS is also calculated and considers all convertible securities that could increase the number of shares outstanding, such as stock options, resulting in a lower EPS value

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    “WEEK 9”

    PART A

    Calculation of Earnings per Share for the Year 2019:

    EPS (2019) = Net income available for the shareholders / Weighted Avg. Number of Stock

    So,

    Basic EPS for 2019 = $1,460,000 / 1275000

    Basic EPS for 2019 = $1.15

    Calculation of Adjusted Comparative Earnings per share for the Year 2018:

    In the previous year (2018):

    Total Earnings = 1.5 dollars x 9 lacs

    Total Earnings = 1,350,000 dollars


    So,

    Restated shares of the equity (weighted) = add (9 lacs x 1/6) into 9 lacs

    = 9 lacs + 1.5 lacs

    Restated shares of the equity (weighted) = 1,050,000

    Calculation of BEPS (Adjusted)

    BEPS = Net profit / Equity Shares

    = 1,350,000 / 1,050,000

    BEPS = 1.28 dollars or 1.3 dollars

    PART B

    Diluted (EPS)

    Diluted Earnings per share is defined as the earnings that are made on each stock of a

    company that is considered public and calculated on the assumption that all changeable securities

    were appropriately exercised. Not only the common shares but also convertible Pref. stock,

    warrants, convertible bonds, and stock options are taken into consideration by the DEPS, which

    assumes that all these securities are altered truly. Such EPS is seeing essential for the companies’

    shareholders as the earnings that are earned by a stockholder in the worst situations are laid down

    by DEPS. It is necessary for the calculation of diluted earnings per share to add the effect of all

    the common stocks that are considered dilutive. It is important to know that the company’s basic

    EPS is always greater than it’s another EPS (diluted) in the case when the profit is earned by
    such an organization. The reason is that the profit that is generated is divided among a larger

    number of stocks, Similarly, if the company faced a loss in any of the years, a lower amount of

    loss will be shown by the diluted earnings per share as compared to basic EPS as such loss would

    be spread out over a larger number of stocks.

    Stock options are one of the securities that can dilute the company’s EPS (basic). Such

    securities are not considered as the common shares of the corporation; however, they can be

    changed into the common stock if that option is exercised by the holder. When the stock options

    are converted into common stock, the no. of shares outstanding (weighted) is increased due to

    such dilutive securities that bring a decline in the company’s EPS.

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