[jschooley54]

So just to make sure methodology is right, when testing for Dilutive EPS, if you have a question that involves convertable PS and Convertible bonds. You should compare the dilutive eps for PS to basic to see if it is dilutive, then compare the Convertible bonds dilutive eps to basic to see if it is dilutive. Then add the shares to the commone outstanding shares for each only if they are dilutive on their own? Does that make sense the way im wording it? and if so am i thinking of that right?

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[makiu]

@jschooley54

Hi, there is a good video from free from Roger CPA…that could be helpful .. just google it..Good luck studying in your final stretch..

[Anonymous]

Yes, my understanding of it was you calculate each PS and convertible bonds to see which is most dilutive, add that one in to come up with a preliminary diluted EPS, then add the other only if it is still dilutive.

So, just as a very simple example, if your basic EPS is $5, the EPS of just the PS is $4 and the EPS of convertible bonds is $3, you would add the EPS of the convertible bonds to your basic EPS.

Lets say your new EPS after including bonds is now $4.50. In that case, your PS ($4) is still dilutive, so you would include it. If your new EPS (basic EPS plus convertible bonds) is $3.85, you would not include PS as that is now antidilutive.

[Author]

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