Your Gateway to Financial Literacy
What Is Dilution? Dilution refers to the decrease in existing shareholders’ ownership percentage following the issuance or creation of new shares by a company. It occurs when companies raise additional equity capital through secondary offerings, stock options for employees, or other optionable securities. As new shares are issued, each current
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Introduction to Cooking the Books Cooking the books is a term used when a company manipulates its financial records to deceive stakeholders, typically investors, by presenting misleading or false financial information. This practice involves various techniques that aim to make a company’s earnings appear better than they truly are. The
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Background on Share Buybacks A share buyback, also referred to as a stock repurchase, is a powerful financial tool that corporations employ when they wish to purchase shares in the open market with the intent of reducing the number of outstanding shares available. This strategic move can result in increased
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What is Earnings Per Share? Earnings Per Share, or EPS, represents the portion of a company’s net income allocated to each outstanding share of its common stock. This critical financial metric is essential for investors looking to measure a business’ profitability. For companies with a straightforward capital structure, featuring only
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