When calculating earnings per share, a company may report a diluted EPS amount. This figure assumes that all Convertible Securities have been exercised, providing a more conservative measure of the company's profitability per share. If there is a big difference between basic EPS and diluted EPS, it shows that dilutive securities could significantly decrease earnings per share if they were to be exercised.
Learn Diluted EPS with interactive examples and practice exercises in our Income Statement module.
This interactive learning module helps you understand Diluted EPS through hands-on practice and real-world examples.