36 Flashcards
deck 36
what is the basic EPS formula?
income avail. to common SH
/ WACSO
- numerator = NI - PD
- WACSO formula includes shares sold in a time-weighed basis, , +/- stock div’s and reverse splits
what are the potential dilutive sec’s?
- convertible sec’s (PS, conv bonds, etc)
- warrants and other options
- contracts that can be settled in cash/stock
contingent shares
(it takes 1 of these to be called complex structure)
what is the formula for dilution fom SO’s, warrants, and their equiv’s?
- NC to numerator
- add'l shares = #sh's - [(#sh*EP)/MP]
(if EP > MP, it is anti-dilutive)
what is the formula for dilution from conv. bonds?
- add int exp saved, net to numerator
[int exp*(1-tax)] - add #sh’s converted to WACSO
*do not include results if
anti-dilutive
how is conv. PS in dilution calc’d?
- do not include PD for numerator
- add # sh’s converted to CS
*remember rule of
anti-dilution
are CF’s per share reported?
they should not be reported
are contingent shares that are dilutive included in the calc. of basic EPS?
yes, if all cond’s for issuance are met
*conversion of pref’d shares can be included in basic EPS
what are some examples of cont. sh’s?
shares issuable upon:
- issuance of a patent
- passage of a specific period of time
- achieving a specific NI target
Does prior year EPS need to be adj’d for stock splits and div’s?
yes, they do
retroactive adj.
should the numerator in basic EPS include deductions of div’s declared in the period on non-cumu. PS (regardless of pmt) and div’s accu’d in period on cumu PS (regardless of declaration)?
yes, they should include both deductions
what do CFO, CFI, and CFF include?
- CFO = OA and OL
(day-to-day business) - CFI = CR + CD of non-CA’s
- CFF = CR + CD from
D (non-CL) and E
how are bank overdrafts treated?
- GAAP = CFF
- IFRS = CFF or CFO if integral part of business
what is the diff. b/w direct and indirect method of presentation of CF’s?
- only diff. is CFO
- direct = cash rec’d - cash paid
..if direct is chosen, 1st suppl sched must show reconc. of CFO
- indirect (reconc)
= NI+Dep.+losses-gains
..if indirect is chosen, must show IT paid and int paid as 1st suppl sched
how is CFO under direct method calc’d?
- use accrual –> cash
(1) find cash rec’d from cust’s
(2) cash int rec’d
(3) cash div rec’d
(4) CR of ins. proceeds + law settlements
(5) cash rec’d from sale of trading sec’s class’d as CA
(6) cash paid to supp’s/emp’s
(7) int paid
(8) IT paid
(9) cash paid to acq. trading sec’s if class’d as CA
(10) other op. cash pmt’s (SGA)
how is CFO calc’d under indirect method?
NI \+dep/amort \+losses/IL -gains/amort. bond prem - equity earnings - (+/-) change OA (inv, A/R, TS, PPD exp) \+ (+/-) change OL (DTL) --------------------------------------- = CFO
