Simple vs complex capital structure

Simple capital structure

• Contains no potentially dilutive securities, but only common stockholders, preferred stockholders and nonconvertible debt.
• Companies with simple capital structures only need to report basic EPS.

Complex capital structure

• Contain potential dilutive securities such as warrants and/or options and/or convertible debt instruments.
• Companies that have a complex capital structure must report earnings per share (EPS) on a basic and fully diluted basis