On Oscars night, we’ll hear winners thanking the Academy for their awards. Beyond these gracious moments though, few understand how the Academy nominates and selects each winner.

Most Oscar categories are nominated by Academy members of the corresponding discipline within the organization’s total voting membership of more than 7,000 individuals. Actors nominate actors, directors nominate directors and so on. To do so, each voting member casts a ballot with up to five nominees for their given category, ranked in order of preference. Exceptions are the Documentary, Foreign and Animated Feature Film categories, whose nominations are selected by a special committee comprising members from all branches. Additionally, all Academy members vote for Best Picture.

In order to be considered for an Oscar nomination, a film must be feature-length, have been shown in Los Angeles theaters for at least a week, and have opened in the previous calendar year. So, even though “Black Panther” fits the first two criteria (and has amassed widespread acclaim), the film wasn’t considered for an Oscar nomination this year because it was released in February 2018.

Once ballots are cast — either electronically or via mail — the accounting firm PricewaterhouseCoopers determines nominees based on a voting process called a “preferential voting system.” Here’s how it works:

Step 1: Calculating the “magic number.” To guarantee a nomination, votes for a film must reach a certain threshold, which is determined by dividing the total number of ballots (one per voting member) by the number of available nominations, plus one. Most categories select five nominees, so a film is nominated once it obtains 1/6 plus 1 of the total votes. Because the Best Picture category has 10 nominees, its magic number is 1/11 plus 1 of the total votes.

Step 2: Select immediate nominations from first-place rankings. The ballots are divided and counted based on their first-place rankings. If a film’s first-place tally reaches the magic number, it immediately becomes nominated. For example, let’s say 6,000 ballots are cast for Best Actress and Saoirse Ronan receives 1,500 first-place votes for her leading role in “Lady Bird.” Ronan is immediately nominated in the category because she has reached the magic number — in this case, 1,001 votes.

Step 3: Apply the “Surplus Rule.” If votes for any film surpass the magic number by more than 10 percent, those extra votes are reallocated to the film ranked second on each ballot. If Ronan received 1,500 first-place votes, she only needed 1,001 of them to secure her nomination. The remaining 499 votes are reallocated to the film ranked second on each ballot.

Vote counts carry over from each step, so if the original votes plus the surplus votes reach the magic number, then that film becomes a nominee. If Margot Robbie originally garnered 800 first-place votes for “I, Tonya” and 205 second-place votes from Ronan’s 499 extra ballots, Robbie’s compounded vote count of 1,005 would surpass the magic number of 1,001 and she would be nominated.

Step 4: Organize which films are still in the running. If five nominees haven’t been selected after applying the Surplus Rule, any films that obtain less than 1 percent of the first-place votes are eliminated and their votes are reallocated to the film ranked second on each ballot. Then, the preferential voting system carries out with second-place rankings.

Step 5: Repeat. This process repeats, continuing down the rankings, until five nominees are selected.

Selecting the Oscar winner in a separate voting process is more straightforward; the nominee to garner the most votes from members within the branch wins the Oscar. Best Picture is an exception, however. All Academy members may vote among the nominees for Best Picture and the winner is selected through the aforementioned preferential voting system.

Clearly, the voting system is elaborate, but is it effective? Preferential voting was designed in 2009 to enable films with small but passionate fan bases to be nominated. Some argue, however, that this ranking system is also responsible for selecting “mediocre” Best Picture winners that collect the broadest — but not the most passionate — support.

When first-place votes are divided up between highly praised yet small films — such as in 2010 with “127 Hours,” “Black Swan” and “The Social Network” — none of them collect enough votes to reach the magic number. Instead, all of those ballots defer to a generally well-liked second choice — in this case, “The King’s Speech,” which took home Best Picture that year. So, while the intricacy of the selection process is impressive, perhaps it will need to evolve into something more effective.