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
Does anyone know which one Prodigal is talking about?
Forward to spot rate conversions in FI.
Thanks evol, Guess that topic need to be revisited. P
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