Investor Glossary-diluted earnings per shareInvestor Glossary-diluted earnings per shareInvestor Glossary-diluted earnings per shareInvestor Glossary-diluted earnings per shareInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Diluted Earnings Per Share

The HTML to link to this page
 

Diluted earnings per share is earnings per share that fully reflects the impact the firm's dilutive securities (eg, convertible bonds) may have on earnings per share. Diluted earnings per share is distinguished from basic earnings per share, both of which are computed by dividing net income by the weighted average number of outstanding shares. But only diluted earnings per share assumes the exercise of stock options and warrants, and the conversion of convertible bonds and preferred shares, in computing outstanding shares. Because diluted earnings per share entails spreading net income over more outstanding shares, the additional equity dilutes (ie, reduces) earnings on a per-share basis. Diluted earnings per share is thus the more conservative measure of earnings per share. The computation and presentation of diluted earnings per share is determined by Statement of Financial Accounting Standards 128. Diluted earnings per share ranks among accounting's most thorny issues, and the computation of diluted earnings per share can be extremely complex.



Rate this diluted earnings per share definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: inflation, EBITDA, average price per share, current ratio, FTSE, 1035 exchange, LIBOR, annual return, deferred revenue, option premium, 401a, command economy, open position, real GDP, implied volatility, in escrow, quality assurance, cancelled check, dividends payable, covered put, stock split, 1031 exchange, class C shares, required rate of return, ex-dividend, limit order, risk management, Zero Cost Collar, reverse mortgage, minority interest, VIX, deferred tax, Key Rate Duration, margin rate, wholly-owned subsidiary, APR, 144a, diluted share, stock market close, FICO score, ex-dividend date, phantom income, per diem, debt service coverage, balance sheet, retained earnings, irrevocable trust, labor relations, liquidity ratio


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use