If a company has no preferred stock,basic earnings per share is equal to net income divided by the number of weighted average common shares outstanding.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with dividends that are paid out before those to common stockholders.

Basic Earnings Per Share

A calculation that shows a company's profitability per share of stock by dividing net income by the weighted average number of common shares outstanding.

Weighted Average

Weighted average is a calculation that takes into account the varying degrees of importance of the numbers in a data set, used in accounting for inventory cost.