Share Dilution

  • I often see K's show how they get from basic to diluted shares, and then immediately after list a table of outstanding options/RSUs, etc, that were "not included in the diluted share count shown above because they would be "anti-dilutive"? What does this mean, why do options/RSUs regularly get excluded from the disclosed dltd share count calc?
  • Do i need to treat Employee stock purchase plans (ESPPs) differently than regular outstanding options when calculating share dilution under treasury method?  I see in many co's K's ESPPs have authorization to issue quite a large amount of shares (or options?), and if i assume full dilution (bc no exercise price is usually provided with ESPPs, right?) than it can make a big difference to the final diluted shares calc. WHat is best practices here?
  • Do i treat RSUs the same was as options outstanding when doing the treasury method? Just use the "weighted avg exercise px" for the RSUs given in the K?
  • Warrants should generally be treated like options as well, right? I should read the conditions for exercise, but generally they are just long-dated options.

ANy other just general best-practices (like making sure i always do trsry method) that i should always do when modeling, that are maybe not obvious? ... things like excl operating lease liabilities when calculating entp value.... anything else?

WSO Elite Modeling Package

  • 6 courses to mastery: Excel, Financial Statement, LBO, M&A, Valuation and DCF
  • Elite instructors from top BB investment banks and private equity megafunds
  • Includes Company DB + Video Library Access (1 year)

Comments (1)

Sep 1, 2021 - 9:15am

Labore consequatur dolor quis et. A nihil dolorum vel et sunt cupiditate. Aut totam minima porro aut eligendi consequatur magni. Perferendis dolor ea recusandae consectetur ut. Culpa nihil eum et assumenda enim commodi.

Possimus hic ut voluptas quidem autem. Quia harum tenetur eveniet voluptatem blanditiis quasi. Esse dolorem in velit velit voluptatem tempora.

Dolore nulla debitis repudiandae. Illum ea non odit. Iusto dolor velit rerum omnis molestiae ducimus.

Start Discussion

Total Avg Compensation

September 2021 Investment Banking

  • Director/MD (10) $853
  • Vice President (38) $367
  • Associates (218) $232
  • 2nd Year Analyst (130) $153
  • 3rd+ Year Analyst (30) $147
  • Intern/Summer Associate (102) $144
  • 1st Year Analyst (483) $135
  • Intern/Summer Analyst (375) $82