Desde Investopedia

TERM OF THE DAY

Diluted Earnings Per Share Diluted EPS is a performance metric used to gauge the quality of a company's earnings per share (EPS) if all convertible securities were exercised. Convertible securities are all outstanding convertible preferred shares, convertible debentures, stock options (primarily employee-based) and warrants. Unless the company has no additional potential shares outstanding, which is a relatively rare circumstance, the diluted EPS will always be lower than the simple EPS.

Breaking it Down: Diluted EPS takes into account what would happen if dilutive securities were exercised. Dilutive securities are securities that are not common stock but can... Read More