Penn State - Smeal College of Business Contact the Smeal College of Business
Accounting Department directory

Steven Huddart picture
 
Should I exercise my stock options?
 
Stock compensation glossary
 
 
 
 
Research
 
Case Studies
 
Courses
 
 
 
 
Office hours and location
 
Facts About The School
 
Home | Previous | Next | Huddart Site Map

Earnings per share


The accounting earnings for a fiscal period divided by the average number of common shares outstanding during the period is called basic earnings per share. EPS is an acronym for earnings per share.

Some securities of a corporation may be contingently convertible into common stock, including Compensation stock options and convertible debt. Diluted earnings per share are computed by adjusting (i) the denominator of the EPS ratio to give effect to potential change in the number of shares outstanding because, e.g., the options are exercised or the debt in converted, and (ii) the numerator of the EPS ratio to give effect to changes in reported earnings because, e.g., certain interest expense is not incurred if convertible debt is converted to equity.


Steven Huddart
Smeal College of Business, Penn State University, University Park, PA 16802-3603 USA
(814) 863-0448
huddart@psu.edu
vCard
Home | Previous | Next | Huddart Site Map

http://www.personal.psu.edu/faculty/s/j/sjh11/OptionGlossary/EarningsPerShare.shtml
was last updated on Mon, Sep 6, 2021.
Today is Fri, May 20, 2022.

Unless otherwise noted, all material is:
Copyright ©1995-2021 Steven Huddart. All rights reserved.