标题: Calculating Average weighted shares outstanding [打印本页] 作者: w1977 时间: 2011-7-11 17:45 标题: Calculating Average weighted shares outstanding
I am having a difficult time wrapping my mind around computing the Average weighted shares outstanding [ denominator for basic and diluted EPS]
Don't seem to understand the entire concept. I tried the CFAI text and scheweser.
Could someone please explain. Thank you in advance.作者: kasinkei 时间: 2011-7-11 17:45
what dont you understand? anythign in particular????
one thing to remember is everything MUST be adjusted retrospectively....including treasury repurchsing, stock splits, stock divs, sotck bonus....
so the most recent news (that will affect the amount of shares) will affect all share related activities that happened before the news....
so if you have 5000 shares outstsanding on Jan 1
and then issue 300 on Mar 1
then announce a stock split of 2for1 on April 1
your outstanding shares would be
10k *12 (5k*2) = 120k +
600*10 (300*2)=6k
for a total of 126k/12= the weighting would be 10.5k sahres as the denominator.作者: pogo 时间: 2011-7-11 17:45
Remember stock splits and stock dividends are retrospectively stated as an addition and reverse stock split are a subtraction.
There assumed to have been OUTSTANDING SINCE THE BEGINNING OF THE YEAR
Treasury stock or repurchased stock are subtracted in the same manner if it occurred prior to the split/dividend. If shares were repurchased after, then subtract the repurchased shares by the Fraction of the year. Fraction of the year is the time period in months, like a moving weighted average. Quick example : Between Jan and next event (3/1 - Issued) is 2 out of 12 months (January and Feb), hence, (2/12).
Restatement Factor can be 2 for a 2-for-1 stock split, 3 for 3-for-1 split, 25% stock dividend is 1.25.
In this example its 1.50 for a 50% stock dividend
Shares outstanding: Its cumulative and so keep adding/subtracting for the activity between periods. That you MUST NOT FORGET !! So 1/1: 100,000, on 3/1, issued 20,000 more, so column b must show the changes, UNADJUSTED for retrospective treatment. So, the 180,000 is the 120,000 + (.50*120,000) = 120,000 +60,000 (additional shares) = 180,000
