Basic EPS = Basic Weighted Average Shares
Dilution occurs when a company issues additional shares that reduce an existing investor’s proportional ownership in the company.
Outstanding shares represent investor or institutional ownership in a company. Fully diluted shares include outstanding shares plus additional shares if all convertible securities are exercised.
What is Weighted Average Shares Outstanding? Weighted average shares outstanding refers to the number of shares of a company calculated after adjusting for changes in the share capital over a reporting period.
What is a good eps?
The EPS Rating takes into account the growth and stability of a company’s earnings over the past three years, with extra weighting put on the most recent two quarters. The result is assigned a rating of 1 to 99, with 99 being best.
How is a weighted average calculated?
To find a weighted average, multiply each number by its weight, then add the results. If the weights don’t add up to one, find the sum of all the variables multiplied by their weight, then divide by the sum of the weights.
The investor can calculate a weighted average of the share price paid for the shares. In order to do so, multiply the number of shares acquired at each price by that price, add those values and then divide the total value by the total number of shares.
Weighted average share outstanding is calculated by multiplying an outstanding number of shares after considering issuance and buybacks of shares in each reporting period with its time-weighted portion and thereafter summing up the total for each reporting period in a fiscal year.
What does fully diluted capitalization mean?
The term fully-diluted means that the capitalization is calculated assuming that all plans and obligations (whether outstanding or potential) to issue shares have been fulfilled.
Diluted EPS Formula = (net income – preferred dividends) / (basic shares + conversion of any in-the-money options, warrants, and other dilutions) is derived by taking net income during the period and dividing by the average fully diluted shares outstanding in the period.