Chapter 19 - Share Based Compensation And Earnings Per Share Flashcards Preview

Intermediate Accounting III > Chapter 19 - Share Based Compensation And Earnings Per Share > Flashcards

Flashcards in Chapter 19 - Share Based Compensation And Earnings Per Share Deck (4)
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1
Q

Earnings Per Share (EPS)

A

In a company with a simple capital structure, the amount the holder of a single share of common stock would receive if all earnings were distributed in the form of dividends or the amount of loss that would be allocated to the holder of a single share of common stock.

EPS = (Net income or loss - current period preferred dividends declared - current period preferred dividends on cumulative preferred stock not declared) / weighted average common shares outstanding

2
Q

Simple Capital Structure

A

A capital structure under which there are no potentially dilutive securities that can be converted into common stock such as convertible bonds, convertible preferred stock, options, rights, and warrants.

3
Q

Complex Capital Structure

A

A capital structure under which there are potentially dilutive securities that can be converted into common stock.

4
Q

Basic EPS

A

In a company with a complex capital structure, the amount the holder of a single share of common stock would receive if all earnings were distributed in the form of dividends or the amount of loss that would be allocated to the holder of a single share of common stock.

Basic EPS = (Net income or loss - current preferred dividends declared - current preferred.