|                                                                    |  |             
|------------------------------------------------------------------- |  | ------------
|AAMES FINANCIAL CORPORATION                                         |  |             
|Computation of basic and diluted net income (loss) per common share |  | Exhibit 11.1
|Three months ended March 31, 2005 and 2004                          |  |             
|(amounts in thousands, except per share data)                       |  |             



|                                                                          |  |                             |        |   |      |   |         |  
|------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------- | -
|                                                                          |  | Three Months EndedMarch 31, |       
|                                                                          |  | 2005                        |        |   | 2004 |  
|Basic net income (loss) per common share:                                 |  |                             |        |   |      |   |         |  
|Net income (loss)                                                         |  | $                           | (766   | ) |      | $ | 20,890  |  
|Less: Accrued dividends on Series B, C, and D Convertible Preferred Stock |  |                             |       |   |      |   | (2,869  | )
|                                                                          |  |                             |        |   |      |   |         |  
|Basic net income (loss) to common stockholders                            |  | $                           | (766   | ) |      | $ | 18,021  |  
|                                                                          |  |                             |        |   |      |   |         |  
|Basic weighted average number of common shares outstanding                |  |                             | 61,420 |   |      |   | 7,120   |  
|                                                                          |  |                             |        |   |      |   |         |  
|Basic net income (loss) per common share                                  |  | $                           | (0.01  | ) |      |   | 2.53    |  
|                                                                          |  |                             |        |   |      |   |         |  
|Diluted net income (loss) per common share:                               |  |                             |        |   |      |   |         |  
|Basic net income (loss) to common stockholders                            |  | $                           | (766   | ) |      | $ | 18,021  |  
|Plus: Accrued dividends on Series B, C, and D Convertible Preferred Stock |  |                             |       |   |      |   | 2,869   |  
|Interest on 5.5% Convertible Subordinated Debentures                      |  |                             |       |   |      |   | 522     |  
|                                                                          |  |                             |        |   |      |   |         |  
|Diluted net income (loss) to common stockholders                          |  | $                           | (766   | ) |      | $ | 21,412  |  
|                                                                          |  |                             |        |   |      |   |         |  
|Basic weighted average number of common shares outstanding                |  |                             | 61,420 |   |      |   | 7,120   |  
|Plus incremental shares from assumed                                      |  |                             |        |   |      |   |         |  
|Conversions of:                                                           |  |                             |        |   |      |   |         |  
|Series B, C and D Convertible Preferred Stock                             |  |                             |       |   |      |   | 85,061  |  
|5.5% Convertible Subordinated Debentures                                  |  |                             |       |   |      |   | 824     |  
|Exercise of:                                                              |  |                             |        |   |      |   |         |  
|Common Stock options                                                      |  |                             |       |   |      |   | 8,111   |  
|Warrants                                                                  |  |                             |       |   |      |   | 3,684   |  
|                                                                          |  |                             |        |   |      |   |         |  
|Diluted weighted average number of common shares outstanding              |  |                             | 61,420 |   |      |   | 104,800 |  
|                                                                          |  |                             |        |   |      |   |         |  
|Diluted net income (loss) per common share                                |  | $                           | (0.01  | ) |      | $ | 0.20    |  
|                                                                          |  |                             |        |   |      |   |         |