EPS Shares Outstanding
The speaker covers the concepts of earnings per share and diluted earnings per share. He talks through how to calculate the EPS; it is Net Income divided by Shares Outstanding. Diluted earnings per share is calculated by dividing Net Income by the number of diluted shares outstanding. If you are manually calculating these numbers, it is wise to check against the values on the actual income statement. Always review the footnotes to understand what items are included in each component of the calculation.