Earnings per share: numerator and denominator summary table

Below is a table I made to summarize what happens to the numerator and denominator for EPS calculations for each kind of relevant transaction. I can see this being helpful for CPA exam preparation, as well as for students of Intermediate Accounting. I include information regarding:

  • Net income
  • Preferred stock dividends: cumulative and noncumulative, convertible and nonconvertible
  • Common shares
  • Treasury shares
  • Share dividends
  • Convertible preferred stock
  • Incentive stock options
  • Convertible bonds
  • Whether the effect is dilutive or not (PCS = potential common shares)

I also included footnotes for elaboration on three of the more complex points.

This is a summary. It does not explain every calculation needed for EPS. It also does not explain how or when to calculate weighted averages for the shares in the denominator.

Here is a PDF of the sheet hosted on Box.

Earnings per share summary table for numerator and denominator

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