Note 7 - Earnings per share

Basic earnings per share is computed by dividing consolidated net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing consolidated net income by the weighted average number of common shares outstanding increased by the effects of assuming that other potentially dilutive securities (such as stock options) outstanding during the period had been exercised and the treasury stock method had been applied. Potentially issuable securities totaling 124,097 and 0 shares for the three months ended July 31, 2019 and 2018, respectively, and 124,097 and 245,328 shares for the nine months ended July 31, 2019 and 2018, respectively, were excluded from the calculation of diluted per share amounts because of their anti-dilutive effect.

The following table summarizes the computation of basic and diluted weighted average shares outstanding:


	Three Months Ended July 31,		Nine Months Ended July 31,
	2019	2018	2019	2018
Weighted average shares outstanding for basic earnings per share	9,363,528	9,202,095	9,343,067	9,045,340

Add effects of potentially dilutive securities-assumed exercise of stock options	509,371	527,513	506,822	397,272

Weighted average shares outstanding for diluted earnings per share	9,872,899	9,729,608	9,849,889	9,442,612