Companies must report basic EPS, weighted average EPS, and fully diluted EPS. Basic EPS only includes common shares, weighted average EPS factors in common shares and dilutive securities, and fully diluted EPS assumes all convertible securities are exercised. Presenting the different EPS calculations supports investors' needs by providing a comprehensive view of a company's earnings performance and potential earnings dilution.

1. Companies must report several types of earnings per share
(EPS) in their financial statements, including basic EPS,
weighted average EPS and fully diluted EPS. How would you
describe the differences between these types of EPS to a non-
financial manager? What are your thoughts about how
presenting each of these types of EPS in the financial
statements supports the needs of investors?