Key Takeaways
- Diluted EPS shows earnings per share if all convertible securities are exercised
- It provides a more conservative view than Basic EPS
- Lower diluted EPS indicates more potential share dilution
- SEC requires public companies to report both Basic and Diluted EPS
- Investors use diluted EPS to assess worst-case earnings scenarios
About the Diluted EPS Calculator
The Diluted EPS Calculator is a comprehensive online tool designed to help you calculate diluted earnings per share with stock options and convertibles. Whether you're a professional investor, financial analyst, or student, this free calculator provides accurate results instantly.
Understanding Diluted EPS
Diluted Earnings Per Share (EPS) is a profitability metric that shows the earnings attributable to each share of common stock, assuming all convertible securities are exercised. This includes stock options, warrants, convertible preferred stock, and convertible debt.
Diluted EPS = Net Income / (Shares Outstanding + Dilutive Securities)
How to Use This Calculator
Enter Net Income
Input the company's total net income (earnings after taxes). This can be found on the income statement.
Enter Shares Outstanding
Input the current number of common shares issued. This is the basic share count used for Basic EPS.
Enter Dilutive Securities
Input the total number of potential shares from stock options, warrants, and convertible securities.
View Results
Click Calculate to see Diluted EPS, Basic EPS, and the dilution impact percentage.
Key Features
- Free to use with no registration required
- Mobile-friendly responsive design
- Instant calculations with real-time results
- Accurate formulas based on industry standards
- Easy to embed on your website
- No downloads or installations needed
Practical Applications
This finance calculator is useful in many scenarios including investment analysis, financial reporting, equity research, and academic studies. Understanding diluted EPS helps investors make informed decisions about stock valuation and potential share dilution.
When to Use Diluted EPS
- Stock Valuation: Compare P/E ratios using diluted EPS for conservative estimates
- Investment Decisions: Understand the true per-share earnings potential
- Company Analysis: Assess the impact of employee stock options on shareholder value
- Financial Modeling: Project future earnings with potential dilution
Frequently Asked Questions
Basic EPS uses only the current shares outstanding, while Diluted EPS includes all potential shares from convertible securities. Diluted EPS is always equal to or lower than Basic EPS, providing a more conservative earnings estimate.
Diluted EPS shows the worst-case scenario for earnings per share if all convertible securities are exercised. This helps investors understand potential share dilution and make more informed valuation decisions.
Dilutive securities include stock options, warrants, convertible preferred stock, convertible bonds, and any other instruments that could be converted into common shares. Only securities that would reduce EPS are included in the diluted calculation.
Yes, this calculator is completely free to use with no hidden charges or registration requirements.
Yes! Click the "Copy Widget Code" button above to get the embed code for your website.
Additional Resources
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