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Diluted Earnings Per Share
Earnings per share (EPS) is the monetary value of earnings per outstanding share of common stock for a company. It is a key measure of corporate profitability and is commonly used to price stocks. In the United States, the Financial Accounting Standards Board (FASB) requires EPS information for the four major categories of the income statement: continuing operations, discontinued operations, extraordinary items, and net income. Calculating Preferred stock rights have precedence over common stock. Therefore, dividends on preferred shares are subtracted before calculating the EPS. When preferred shares are cumulative, annual dividends are deducted whether or not they have been declared. Dividends in arrears are not relevant when calculating EPS. ;Basic formula :Earnings per share = ;Net income formula :Earnings per share = ;Continuing operations formula :Earnings per share = Diluted earnings per share ''Diluted earnings per share'' (diluted EPS) is a company's earnings pe ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Earnings
Earnings are the net benefits of a corporation's operation. Earnings is also the amount on which corporate tax is due. For an analysis of specific aspects of corporate operations several more specific terms are used as EBIT (earnings before interest and taxes) and EBITDA (earnings before interest, taxes, depreciation, and amortization). Many alternative terms for earnings are in common use, such as income and profit. These terms in turn have a variety of definitions, depending on their context and the objectives of the authors. For instance, the IRS uses the term profit to describe earnings, whereas for the corporation the profit it reports is the amount left after taxes are taken out. Non-routine earnings The use of intellectual property generates non-routine profits. Those are often an order-of-magnitude greater than routine earnings.John Hand and Baruch Lev (editors): Intangible Assets, Values, Measures. and Risks; Oxford University Press, 2003. Non-routine profits are essent ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Generally Accepted Accounting Principles (United States)
Generally Accepted Accounting Principles (GAAP or U.S. GAAP, pronounced like "gap") is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC) and is the default accounting standard used by companies based in the United States. The Financial Accounting Standards Board (FASB) publishes and maintains the Accounting Standards Codification (ASC), which is the single source of authoritative nongovernmental U.S. GAAP. The FASB published U.S. GAAP in Extensible Business Reporting Language (XBRL) beginning in 2008. Sources of GAAP The FASB Accounting Standards Codification is the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. In addition to the SEC's rules and interpretive releases, the SEC staff issues Staff Accounting Bulletins that represent practices followed by ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Corporate Finance
Corporate finance is the area of finance that deals with the sources of funding, the capital structure of corporations, the actions that managers take to increase the value of the firm to the shareholders, and the tools and analysis used to allocate financial resources. The primary goal of corporate finance is to maximize or increase shareholder value. Correspondingly, corporate finance comprises two main sub-disciplines. Capital budgeting is concerned with the setting of criteria about which value-adding projects should receive investment funding, and whether to finance that investment with equity or debt capital. Working capital management is the management of the company's monetary funds that deal with the short-term operating balance of current assets and current liabilities; the focus here is on managing cash, inventories, and short-term borrowing and lending (such as the terms on credit extended to customers). The terms corporate finance and corporate financier ar ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Whisper Number
Whisper numbers are the "unofficial and unpublished earnings per share (EPS) forecasts that circulate among professionals on Wall Street... generally reserved for the favored (wealthy) clients of a brokerage." According to Per Afrell, a former analyst at UBS Warburg, buy and sell side research analysts generally maintain a 20 plus page spreadsheet to calculate their earnings per share estimates. When the estimate is first calculated by sell-side analysts, the number is submitted to companies such as First Call to be averaged with other analysts' estimates for the consensus earnings estimate. As new information is made available and plugged into the spreadsheet, the calculation may change several times leading up to a company's actual earnings release. However, the analyst is generally not going to issue a new report and revise his or her published estimate with each new calculation, resulting in the analyst's true expectations differing from his or her published number. Therefore ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Accretion/dilution Analysis
Accretion/dilution analysis is a type of M&A financial modelling performed in the pre-deal phase to evaluate the effect of the transaction on shareholder value and to check whether EPS for buying shareholders will increase or decrease post-deal. Generally, shareholders do not prefer dilutive transactions; however, if the deal may generate enough value to become accretive in a reasonable time, a proposed combination is justified. Aside is a simplified example. A real-life accretion/dilution analysis may be much more complex if the deal is structured as cash-and-stock-for-stock, if preferred shares and dilutive instruments are involved, if debt and transaction fees are substantial, and so on. Generally, if the buying company has a higher P/E multiple than that of the target, the deal is likely to be accretive. The reverse is true for a dilutive transaction. See also *Post-money valuation *Pre-money valuation A pre-money valuation is a term widely used in the private equity ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Employee Stock Purchase Plan
In the United States, an employee stock purchase plan (ESPP) is a means by which employees of a corporation can purchase the corporation's capital stock, often at a discount. Employees contribute to the plan through payroll deductions, which build up between the offering date and the purchase date. At the purchase date, the company uses the accumulated funds to purchase shares in the company on behalf of the participating employees. The amount of the discount depends on the specific plan but can be around 15% lower than the market price. ESPPs can also be subject to a vesting schedule, or length of time before the stock is available to the employees, typically one or two years of service. Depending on when the employee sells the shares, the disposition will be classified as either qualified or not qualified. If the position is sold two years after the offering date and at least one year after the purchase date, the shares will fall under a qualified disposition. If the shares a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Preferred Stock
Preferred stock (also called preferred shares, preference shares, or simply preferreds) is a component of share capital that may have any combination of features not possessed by common stock, including properties of both an equity and a debt instrument, and is generally considered a hybrid instrument. Preferred stocks are senior (i.e., higher ranking) to common stock but subordinate to bonds in terms of claim (or rights to their share of the assets of the company, given that such assets are payable to the returnee stock bond) and may have priority over common stock (ordinary shares) in the payment of dividends and upon liquidation. Terms of the preferred stock are described in the issuing company's articles of association or articles of incorporation. Like bonds, preferred stocks are rated by major credit rating agencies. Their ratings are generally lower than those of bonds, because preferred dividends do not carry the same guarantees as interest payments from bonds, and becaus ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Convertible Debt
In finance, a convertible bond or convertible note or convertible debt (or a convertible debenture if it has a maturity of greater than 10 years) is a type of bond that the holder can convert into a specified number of shares of common stock in the issuing company or cash of equal value. It is a hybrid security with debt- and equity-like features. It originated in the mid-19th century, and was used by early speculators such as Jacob Little and Daniel Drew to counter market cornering. Convertible bonds are most often issued by companies with a low credit rating and high growth potential. Convertible bonds are also considered debt security because the companies agree to give fixed or floating interest rate as they do in common bonds for the funds of investor. To compensate for having additional value through the option to convert the bond to stock, a convertible bond typically has a coupon rate lower than that of similar, non-convertible debt. The investor receives the po ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Deloitte Touche Tohmatsu
Deloitte Touche Tohmatsu Limited (), commonly referred to as Deloitte, is an international professional services network headquartered in London, England. Deloitte is the largest professional services network by revenue and number of professionals in the world and is considered one of the Big Four accounting firms along with EY (Ernst & Young), KPMG and PricewaterhouseCoopers (PWC). The firm was founded by William Welch Deloitte in London in 1845 and expanded into the United States in 1890. It merged with Haskins & Sells to form Deloitte Haskins & Sells in 1972 and with Touche Ross in the US to form Deloitte & Touche in 1989. In 1993, the international firm was renamed Deloitte Touche Tohmatsu, later abbreviated to Deloitte. In 2002, Arthur Andersen's practice in the UK as well as several of that firm's practices in Europe and North and South America agreed to merge with Deloitte. Subsequent acquisitions have included Monitor Group, a large strategy consulting business, in Janu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
International Financial Reporting Standards
International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB). They constitute a standardised way of describing the company's financial performance and position so that company financial statements are understandable and comparable across international boundaries. They are particularly relevant for companies with shares or securities listed on a public stock exchange. IFRS have replaced many different national accounting standards around the world but have not replaced the separate accounting standards in the United States where U.S. GAAP is applied. History The International Accounting Standards Committee (IASC) was established in June 1973 by accountancy bodies representing ten countries. It devised and published International Accounting Standards (IAS), interpretations and a conceptual framework. These were looked to by many national accounting standard-s ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
