Equity & Earnings Per Share

One-minute revision

• Basic EPS = (NI − Preferred dividends) ÷ weighted-avg common shares
• Cumulative preferred dividends subtracted whether declared or not; noncumulative only if declared
• Options/warrants → treasury stock method (net incremental shares only)
• Convertible bonds → if-converted method (add back after-tax interest to numerator, add shares to denominator)
• Only include if dilutive (i.e., it lowers EPS) — exclude anti-dilutive securities