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Earning per share is calculated with net income available to ordinary share holders only so as preferred dividend is not part of ordinary shareholders that's why it is deducted to find out the net income exclusively available for ordinary shareholders.

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11y ago

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Is preferred stock dividends tax deductible?

No, preferred stock dividends are not tax deductible for the issuing corporation. Unlike interest payments on debt, which can be deducted from taxable income, dividends paid to preferred stockholders are considered a distribution of profits and are not deductible. This means that the corporation pays taxes on its earnings before distributing dividends to preferred stockholders.


What should be deducted from net income in calculating net cash flow from operating activities using the indirect method?

Depreciation expenses


How is a long term liability that is paid deducted from net income for the current year?

Long term liabilities do not get deducted from net income. Gross Income - Expenses = Net Income Net Income - Dividends = Retained Earnings. Paying a Long Term Liability has the following effects on the accounting equation. Decrease Assets (generally current as they are usually paid in cash) Decrease Liabilities (it's less you owe) Owners (stockholders) Equity is unchanged.


How do you calculate dividends?

dividend is a Comprehensive income includes net income, and other comprehensive income. Dividends received are included in net income and are included. However, dividends paid are not included in net income or other comprehensive income (and are therefore not in comprehensive income.


What is best definition of gross income?

Gross income is the money you earn before taxes and national insurance has been deducted. Once deducted, you are left with a net income.

Related Questions

Is preferred stock dividends tax deductible?

No, preferred stock dividends are not tax deductible for the issuing corporation. Unlike interest payments on debt, which can be deducted from taxable income, dividends paid to preferred stockholders are considered a distribution of profits and are not deductible. This means that the corporation pays taxes on its earnings before distributing dividends to preferred stockholders.


Number of times preferred dividends earned?

net income/preferred dividends


Net income formula?

Net income represents the amount of money remaining after all operating expenses, interest, taxes and preferred stock dividends have been deducted from a company's total revenue. The formula is Total Revenue - Total Expenses = Net Income.


What should be deducted from net income in calculating net cash flow from operating activities using the indirect method?

Depreciation expenses


How do you compute a Return on common stockholders equity?

(Net Income - Preferred Stock Dividends) / Average common stockholders' equity


Can medical expenses not covered by insurance be deducted in calculating net income for child support determination?

That's called a rebuttable presumption. see links


What has the author Robert Tannenwald written?

Robert Tannenwald has written: 'Tax reform, double taxation of dividends, and the integration of the corporation and individual income taxes' -- subject(s): Income tax, Law and legislation, Taxation 'Corporate deduction for dividends paid on preferred stock' -- subject(s): Corporations, Dividends, Finance, Stocks


Whether a debenture redemption reserve deducted while calculating EPS?

No, a debenture redemption reserve is not deducted when calculating Earnings Per Share (EPS). EPS is calculated based on net income available to common shareholders, which does not include reserves. The reserve is set aside for future repayment of debentures and is not an expense impacting net income. Therefore, it does not affect the EPS calculation directly.


Are preferred dividends declared and paid added to net income in calculating net cash flow from operating activites using the indirect method?

Dividend declared and paid is shown under cash flows from financing activities in cash flow statment as it is not primary operating activity of business.


What is the mathematical formula for calculating yield of an investment?

100*Income from investment (over a period)/Average value of Investment The income may be in the form of interest, dividends or appreciation (increase in value of the asset).


How is a long term liability that is paid deducted from net income for the current year?

Long term liabilities do not get deducted from net income. Gross Income - Expenses = Net Income Net Income - Dividends = Retained Earnings. Paying a Long Term Liability has the following effects on the accounting equation. Decrease Assets (generally current as they are usually paid in cash) Decrease Liabilities (it's less you owe) Owners (stockholders) Equity is unchanged.


How do you Compute earnings per share?

Net income minus Preferred Dividends / Weighted-Average of Common Share Outstanding = Earning per share