Diluted Earnings Per Share
factor.formula
Diluted earnings per share calculation formula:
Diluted weighted average number of common shares calculated as:
The weighted average number of common shares is calculated as follows:
The meaning of each parameter in the formula is as follows:
- :
It refers to the total net profit attributable to the parent company's ordinary shareholders in the company's most recent 12 months, reflecting the profit earned by the company through operating activities during the reporting period.
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The weighted average number of common shares held in the calculation of earnings per share after taking into account the impact of all potentially dilutive common shares, including options, warrants, convertible bonds, etc. The diluted weighted average number of common shares will be greater than or equal to the weighted average number of common shares held.
- :
It refers to the weighted average number of all common shares issued and outstanding during the reporting period. It can be approximated by using the average number of common shares issued and outstanding at the beginning and end of the period, or more accurately using the daily weighted average number of shares.
- :
Refers to the potential number of shares that would increase the number of common shares if exercised or converted. For example, unexercised stock options, convertible bonds, etc.
factor.explanation
Diluted EPS is a key indicator for measuring a company's profitability. It more accurately reflects the level of earnings per common share and takes into account the impact of potential equity dilution. The higher the value, the stronger the company's profitability and the higher the shareholder return. This indicator can be used to compare the profitability of different companies and assist in stock valuation. Investors should pay attention to the changing trend of diluted EPS and conduct a comprehensive analysis in combination with other financial indicators.