Earnings per share adjusted for the existence of options and convertible securities.
net income divided by the weighted average number of shares outstanding during a time period, assuming any securities or other contracts to issue common stock, including options and warrants, were exercised or converted into common stock. This method of calculation is required by the Financial Accounting Standards Board for all years that end after December 15, 1997.
Earnings per share, including common stock, preferred stock, unexercised stock options, and some convertible debt. Diluted earnings per share are usually a more accurate reflection of the company's real earning power. see also primary earnings per share, basic earnings per share.
the amount of earnings for the period available to each share outstanding during the period and to each share that would have been outstanding, assuming the issuance of shares for all dilutive potential shares outstanding during the period.
Earnings on a per share basis assuming the exercise of dilutive options. See SFAS No. 128.
See `Fully Diluted Earnings Per Share'. ... Add a comment
A company's net profit after tax and outside equity interest, divided by the weighted average number of equivalent shares issued, taking into account other securities issued by the company (eg options and preference shares).
earnings per share that reflect the potentially dilutive effect of additional shares that could become outstanding, principally as a result of stock options.
The amount of profit for the period that is attributable to ordinary shareholders divided by the weighted average number of ordinary shares outstanding during the period, both adjusted for the effects of all dilutive potential ordinary shares.
Diluted EPS is a performance indicator that expresses a company's net income used to determine diluted earnings per share in relation to the weighted average number of shares for diluted earnings per share. Diluted EPS = (net income + interest expense on convertible bond net of tax)/(weighted average number of shares outstanding during the year + weighted share options + shares from assumed conversion of convertible bond).
In addition to reporting earnings per share, corporations must report diluted earnings per share to account for the possible, though unlikely, occurrence that all outstanding warrants and stock options are exercised, and all convertible bonds and preferred shares are exchanged for common stock. Diluted earnings actually report the smallest potential earnings per common share that a company could have based on its current earnings. In theory, at least, knowing the diluted earnings could influence how much you would be willing to pay for the stock.
Diluted EPS is a company's EPS figure as calculated using fully diluted shares outstanding (i.e. including the impact of stock option grants and convertible bonds). This is important in showing the users of the income statement a "worst-case" scenario if everyone that could have received stock without purchasing it directly for the full market value, decreasing the "worst-case" EPS.