EPS and Public Reporting Topics

Question 1

How do Cumulative Preferred Stock Dividends effect Earnings Per Share?

Answer 1

Preferred Stock Dividends are cumulative, because they are cumulative, when they are declared or paid is not relevant when calculating EPS.

Question 2

What is the purpose of Form 8-K?

Answer 2

Form 8-K is required to be filed by all companies registered with the SEC. This form is filed whenever a major corporate event such as asset acquisitions and disposals, accountant changes, financial instrument changes, management changes, changes in securities, etc.

Question 3

What is the Earnings Per Share Formula?

Answer 3

EPS = (Net Income - Preferred Dividends) / Weighted Avg Shares Outstanding

Question 4

How are stock dividends and stock splits treated when calculating the number of shares outstanding?

Answer 4

Stock dividends and stock splits require reinstatement of the shares outstanding before the stock dividend or stock split. You treat the stock dividend or split as if it occurred at the beginning of the year.

Question 5

What are the filing deadlines for Form 10-K?

Answer 5

The filing deadlines for Form 10-K (annual report that must be filed by US registered companies (issuers)) are as follows:

60 days for LARGE accelerated filers (outstanding common equity is $700 million or more)

75 days for accelerated filers - common equity of $75 million, but less than $700 million and revenues of $100 million

90 days for all other registrants - annual revenue of less than $100 million

Question 6

Form 10-Q is required to be filed with the United States SEC within how many days after the end of the period?

Answer 6

40 days for LARGE accelerated and accelerated filers; and

45 days for all other registrants

Question 7

When computing WACSO for Basic EPS, convertible securities are:

Answer 7

Ignored for purposes of computing the weighted average of common shares outstanding (WACSO).

Question 8

US SEC regulations for financial statement presentation and disclosure requirements of SEC filings can be found in:

Answer 8

Regulation S-X

Regulation S-X sets forth the form and content of and requirements for interim and annual financial statements to be filed with the SEC.

Question 9

For the purpose of computing basic EPS, how should income available to common stockholders be calculated in regards to dividends declared and cumulative and noncumulative preferred stock?

Answer 9

Dividends on noncumulative preferred stock and the current year dividends on the cumulative preferred should should be added to the net loss.