Ask Experts Questions for FREE Help !
Ask
    SamSajasi's Avatar
    SamSajasi Posts: 14, Reputation: 1
    New Member
     
    #1

    Feb 3, 2011, 10:11 PM
    Calculating Earnings Per Share
    [IMG][/IMG]


    I am confused on what numbers to put into "average common shares outstanding" in the equation for calculating earnings per share.

    Earnings Per Share= (Net Income-Preferred Stock Dividends) / (Average Common Shares Outstanding)

    The pictured I posted gives you more information about the problem. However, so far, I have set up the problem in the following way.

    2006 2005
    =(23,516-0) / (69,716,682 +?) =(19,353-0) / (72,152,844 + ?)
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
     
    #2

    Feb 4, 2011, 07:56 AM

    You almost have the problem correct.

    First you need to get the average shares outstanding for year 2006. The formula will be (Ending shares outstanding @ 2006 year eand + the Ending shares outstanding @ 2005 year end) divided by 2. This number will be your average shares outstanding for year 2006.

    Next you divide Net Income by the number calculated above, since there are no outstanding Preferred shares.
    SamSajasi's Avatar
    SamSajasi Posts: 14, Reputation: 1
    New Member
     
    #3

    Feb 7, 2011, 07:01 PM
    Comment on pready's post
    Thanks for your help. I really appreciate it :)

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Calculating Earnings per Share for common stock [ 1 Answers ]

Net Income: $300,913 Avg. Outstanding common stock: 102,000 Preferred Dividends: $0 Amount shares are worth: Unknown - not given I keep coming up with 2.95 - is this correct?

Calculating Earnings per Share [ 12 Answers ]

As an assignment we have to calculate the earnings per share and earnings yield. I am using Visual C++ to create this calculator. The calculator has to be in a form with the correct buttons. I created the form but after writing the code I keep getting NaN as the answer. This is what I've written: ...

Calculating diluted earnings per share [ 0 Answers ]

How is diluted earnings per share calculated? Is all preferred stock convertible to common or only if it is called convertible preferred? I am trying to answer a question in my hw. It lists preferred stock (doesnt say it is convertible), common stock and stock options. I know I need to account...

Basic earnings per share and diluted earnings per share [ 1 Answers ]

:confused: what is the different between Basic earnings per share and Diluted earnings per share :confused:


View more questions Search