How does Benihana calculate basic earnings per share?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
Basic earnings per share is computed using the weighted average number of common shares outstanding during the period and income available to common stockholders. Diluted earnings per share is computed using the weighted average number of common shares outstanding during the period plus the dilutive effect of all potential shares of common stock including common stock issuable pursuant to stock options, warrants, and RSUs. Refer to Note 10 for the calculations of basic and diluted earnings per share.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the basic earnings per share is calculated by using the weighted average number of common shares outstanding during the period and the income that is available to common stockholders.
Diluted earnings per share, on the other hand, is calculated using the weighted average number of common shares outstanding during the period, along with the dilutive effect of all potential shares of common stock. This includes common stock that could be issued through stock options, warrants, and restricted stock units (RSUs).
For a potential Benihana franchisee, understanding these calculations can provide insight into the company's profitability and capital structure. It's important to note that these figures are based on the corporation's overall financial performance and may not directly reflect the performance of individual franchise locations. Reviewing these calculations in the FDD can help a franchisee assess the financial health of Benihana.