This is the number of common shares outstanding as of December 31, 2009 multiplied by 2. However, the weighted-average number of common shares outstanding is different from the year-end number of shares outstanding.
This is the number of common shares outstanding as of December 31, 2009.
This is the number of shares used in the 2009 financial statements for the 2009 EPS calculation. This number needs to be adjusted for the stock split that took place in 2010.
In the 2010 financial statements, the 2009 EPS calculations will have to include the effect of any stock splits or stock dividends that occurred in 2010. In 2010 there was a 2-for-1 stock split. In order to properly compare the EPSs of the different years, the company must go back and multiply the 2009 weighted-average shares outstanding by 2. At the end of 2008 there were 1,100,000 shares outstanding. This was the January 1, 2008 beginning amount of 1,000,000 shares and the 100,000 shares that were issued in September 2008 as a stock dividend. Shares issued as a stock dividend are considered to have been outstanding from January 1 of the first year presented. To this, the company needs to add the effect of any 2009 share transactions. The only transaction was the issuance of 1,000,000 shares on March 31. Since these shares were outstanding for only 9 months of the year, they will count as only 75% (9/12) for the weighted-average share calculation. These shares will become 750,000 shares for this calculation, giving the company 1,850,000 shares outstanding as of December 31, 2009, on the 2009 comparative income statement. Since a two-for-one stock split took place on March 31, 2010, the 2009 weighted-average number of shares outstanding needs to be multiplied by 2 when reporting the 2009 weighted-average number of shares outstanding on the 2010 comparative income statements. Therefore, the weighted-average number of shares outstanding for 2009 on the 2010 comparative statements is 3,700,000.
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