Short cuts to problems problems

sharksfan

Hello All,
In the EPS section in the Income statement section, a quick way to determine if the convertible debt is dilutive is to simply calculate:
conv. debt interest (1-tax) / conv. debt shares.
If this is > basic EPS then not dilutive.

Similar short cuts must be all around the place but I simply can't seem to recollect them. I know there is one regarding a ratio in the Fixed Income/Derivatives/Alt Investments section. Something where a simply addition would give an answer of (say) 3 while the "proper" procedure would give 2.999. Anybody know what I am talking about?
Things like these are great time savers.
Could you please share similar things that you came across?
Thanks!
P

dcfox83

Does anyone know which one Prodigal is talking about?

johnnyBuz

Forward to spot rate conversions in FI.

orang3eph

Thanks evol,
Guess that topic need to be revisited.
P

kamara5

Whether the securities are dilutive or antidilutive before actually calculating diluted EPS:

conv debt:

[interest payment on conv debt * (1 - tax rate) / convertible debt number of shares] < basic EPS => dilutive security

[interest payment on conv debt * (1 - tax rate) / convertible debt number of shares] > basic EPS => antidilutive security

conv preferred stock:

[dividend on preferred stock / number of shares created if converted] < basic EPS => dilutive security

[dividend on preferred stock / number of shares created if converted] > basic EPS => antidilutive security