Diluted Earnings Per Share
factor.formula
Diluted earnings per share calculation formula:
Average total share capital calculation formula:
Potential dilutive stock calculation formula (simplified example):
This formula focuses on the impact of dilution effect. The 'average total shares + potentially dilutive shares' in the denominator is to more accurately reflect the dilution effect.
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It refers to the total net profit attributable to the parent company's shareholders for the last 12 consecutive months. This indicator excludes the profit distribution of non-controlling shareholders and can more accurately reflect the profitability of the parent company's shareholders.
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It refers to the average number of common shares outstanding during the reporting period. Using the average of the beginning and ending share capital can more accurately reflect the impact of changes in share capital during the reporting period.
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Refers to the number of common shares that would increase if all convertible securities, options, etc. were converted into common shares. The addition of these shares will dilute earnings per share, so they need to be considered in the calculation.
factor.explanation
Diluted EPS is calculated by dividing the net profit attributable to the parent company in the last 12 months by the average total share capital plus the number of potentially dilutive shares. It measures the profit per common share if all potentially dilutive securities are converted into common shares. This indicator not only reflects the current profit level, but also takes into account the impact of potential equity expansion, and more accurately assesses the company's true profitability and shareholder returns. When making company valuations and investment decisions, diluted EPS is usually a more reliable indicator than basic EPS. Especially for companies with a large number of potentially dilutive securities (such as convertible bonds, options, etc.), diluted EPS is more valuable for reference.