F8/M1 Earnings Per Share

Question 1

EPS must be presented on the face of Income statement

Answer 1

Only public companies

Question 2

Report discontinued ops separately

Answer 2

Can put in notes

Question 3

Simple capital structure

Answer 3

Basic EPS

Income available to Common Shareholders
/
Weighted average # CS outstanding

Question 4

Stock dividends and stock splits are retroactive

Answer 4

True

Question 5

Complex Capital Structure

Answer 5

Report Basic and Diluted

Question 6

Options, Warrants, and Equivalents

Answer 6

Treasury Stock Method

• Issue shares of treasury stock for value of converted options
• INCREASE DENOMINATOR, No change in Numerator of formula

Question 7

Convertible Securities

Answer 7

Convertible Bonds

Convertible Preferred Stock

Question 8

Convertible Bonds

Answer 8

• ADD to NUMERATOR interest, NET of Tax
• ADD to DENOMINATOR increase in shares
  outstanding from the beginning of period

Question 9

Preferred Stock

Answer 9

• ADD to NUMERATOR preferred dividends

- ADD to DENOMINATOR shares added