Lesson: Calculating Earning Per Share

In this lesson, Nick Palazzolo, CPA, breaks down the intricacies of calculating Earnings Per Share (EPS), a key indicator of a company's profitability. Nick initiates the lesson by illuminating the significance of the weighted average number of common shares outstanding, an essential element in determining EPS. He thoroughly explores both basic and diluted EPS, elucidating the particulars of net income, preferred dividends, and the implications of potential conversions from convertible securities. With an engaging approach, Nick clarifies why understanding EPS is critical for assessing corporate value and what it communicates about the income attributable to each share of common stock. Dive into this comprehensive guide to master the nuances of EPS and prepare for tackling related questions with confidence.