What Are Diluted Earnings Per Share?

Diluted earnings per share refers to the earnings per share calculated based on the total number of ordinary shares at the end of the year, which is equal to the net profit divided by the total equity at the end of the year.

Diluted earnings per share

The fully diluted earnings per share refers to the calculation at the end of the period, without taking the average, such as the fully diluted earnings per share calculated at the end of the year. The weighted average method is a method of calculating the average value, which is averaging according to the average weight.

The data in the balance sheet is a point in time, while the data in the income statement is a

The weighted average number of ordinary shares outstanding is calculated according to the following formula (according to the new accounting standards after 2007):

Weighted average number of ordinary shares issued abroad = number of ordinary shares issued abroad at the beginning of the period + increase of public reserve and dividend increase during the reporting period + (current number of new shares and debt-to-equity ordinary shares) × issued time ÷ reporting period time-(return Number of shares purchased) × time of repurchase ÷ time of reporting period

Difference from diluted earnings per share

Diluted earnings per share is based on basic earnings per share. It is assumed that all dilutive potential ordinary shares issued by the company have been converted into ordinary shares, thereby adjusting the current net profit attributable to ordinary shareholders and the weight of issued ordinary shares separately. Calculated earnings per share. To put it simply, for example, if a company has a warrant, convertible bonds, and equity incentives to be executed, it means that there is a potential increase in shares. In order to accurately evaluate earnings per share, it is necessary to use diluted earnings per share