Enter the net income, average shares, and other convertible instruments into the calculator. The calculator will display the diluted earnings per share.
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Diluted Earnings Per Share Formula
The following equation is used to calculate the diluted EPS of a security.
DEPS = NI / AS + OI
- Where DEPS is the diluted earnings per share
- NI is the net income
- AS is the average shares
- OI is other convertible instruments
Diluted Earnings Per Share Definition
The diluted earnings per share, also known as diluted EPS, is a financial term used to analyze earnings per share when taking into account other convertible instruments that could effect the overall EPS. This allows investors to make more accurate predictions of the future EPS of a company.
Diluted Earnings Per Share Example
How to calculate dilute earnings per share?
- First, determine the net income.
Measure or calculate the net income.
- Next, determine the average number of shares.
This is the average number of shares available.
- Next, determine the other convertible instruments.
Calculate the value of any and all other convertible instruments.
- Finally, calculate the diluted earnings per share.
Calculate the DEPS using the formula above.
A diluted earnings per share is modified version of EPS that takes into account other convertible instruments.