EPS, Dilluted EPS calculation : Convertible Preferred Stock, Convertible Debt, Stock Options, Warrants, or their Equivalents

 

Basic EPS is the amount of income available to common shareholders divided by the weighted average number of common shares outstanding over period.

 

 

 

 

 

Dilluted EPS is in the effect of three types of potentially dillutive financial instruments :

convertible preferred, convertible debt, and employee stock options.

 

 

* Dilluted EPS when a company has Convertible Preferred Stock outstanding (if-converted method)

 

 

 

 

 

* Dilluted EPS when a company has Convertible Debt outstanding (if-converted method)

 

 

 

 

 

* Dilluted EPS when a company has Stock Options, Warrants, or their Equivalents outstanding (treasury stock method under U.S. GAAP)

 

 

 

 

Dilluted EPS will always be less than or equal to basic EPS.