Editing Income statement (section)

===Earnings per share===
Because of its importance, [[earnings per share]] (EPS) are required to be disclosed on the face of the income statement. A company which reports any of the irregular items must also report EPS for these items either in the statement or in the notes.

<math>\text{Earnings per share} = \frac{\text{Net income} - \text{Preferred stock dividends}}{\text{Weighted average of common stock shares outstanding}}</math>

There are two forms of EPS reported:
* '''Basic''': in this case “weighted average of shares outstanding” includes only actual stocks outstanding.
* '''Diluted''': in this case “weighted average of shares outstanding” is calculated as if all stock options, warrants, convertible bonds, and other securities that could be transformed into shares ''are'' transformed. This increases the number of shares and so EPS decreases. '''Diluted EPS is considered to be a more reliable way to measure EPS.'''