Diluted EPS
Also called: diluted earnings per share
Earnings per share calculated as if options, warrants and convertible securities had been turned into shares, so it is usually lower than basic EPS.
Diluted EPS shows how much profit each share would earn if all potential shares were issued. A large gap between basic and diluted EPS warns that existing shareholders may be diluted in future.
Example
Profit of ₹150 crore over 11 crore shares is ₹13.64 basic EPS; with 0.5 crore potential shares from options, diluted EPS is roughly ₹13.04.
Learn more in these lessons
- Earnings per shareHow is earnings per share calculated?
- Share dilution and employee stock optionsHow do new shares and stock options affect existing shareholders?
Related terms
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