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What is the formula for calculating diluted EPS?

What is the formula for calculating diluted EPS?

What is the formula for calculating diluted EPS?

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Jeeba Aug. 13, 2018


Diluted earning per share is a reduction in earning on each share on the assumption that convertible instruments are converted, stock options are exercised and ordinary shares are issued.

While calculating diluted earnings per shares effects will be given to all the potential dilutive shareholders outstanding during the period.

Diluted earning per share = adjusted net profit/weighted average number of shares

Where, adjusted net profit is arrived after considering the participation of potential dilutive shareholder ie. convertible debenture, preference shares etc.