Patent ID: 8417634

Claim:
A method implemented by a processor for characterizing earnings of an entity, comprising: inputting data associated with the entity including a number of common shares outstanding, a value of earnings, a value of dividends per share, a change in the effective number of common shares outstanding, which change in the effective number of common shares outstanding reflects the possibility, based on an economic analysis of conversion of a convertible security, and a value of coupon payments; calculating by a processor at least one value of earnings per share associated with the entity based upon the input data, wherein each value of earnings per share is calculated at least in part using the formula EPS = DPS o + Earnings o - N o ⁢ xDPS o - Coupon N o + Δ ⁢ ⁢ N eff wherein Earnings o equals the input value of earnings, N o equals the input number of common shares outstanding, DPS o equals the input value of dividends per share, Coupon equals the input value of coupon payments, and ΔN eff equals the input change in the effective number of common shares outstanding; calculating by the processor values of earnings per share risk associated with the entity based upon the input data; and recording the calculated earnings per share values associated with the entity and the calculated earnings per share risk values associated with the entity.