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    janatl7's Avatar
    janatl7 Posts: 1, Reputation: 1
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    #1

    Jul 30, 2007, 12:32 PM
    Basic and Diluted Earnings per Share
    As an investor, are basic or diluted earnings per share more important? Why?
    bennjuju's Avatar
    bennjuju Posts: 2, Reputation: 1
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    #2

    Dec 21, 2007, 07:26 PM
    As an investor are basic or diluted earnings per share more important? Why?
    mchohan's Avatar
    mchohan Posts: 1, Reputation: 1
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    #3

    Feb 24, 2009, 09:33 AM
    As an investor, are basic or diluted earnings per share more important? Why
    mahbub1000's Avatar
    mahbub1000 Posts: 1, Reputation: 1
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    #4

    Jul 24, 2010, 03:15 AM
    Diluted earnings per share, or diluted EPS as it is often called, is a more accurate version of how much profit is left for you, the owner, for every share of stock you have in a company.

    In financial reporting two EPS numbers are commonly reported: Basic and Diluted EPS. The Basic EPS is calculated by dividing income available for distribution to common stockholders by the weighted-average number of common shares outstanding. The number calculated this way excludes any possible dilution stemming from outstanding dilutive securities, such as options, warrants, convertible bonds, or convertible preferred stock. Diluted EPS reflects the potential dilution from such dilutive securities. The companies that don't have any dilutive securities, or the companies that report net losses, report only Basic EPS. In case of a net loss, dilutive securities would improve negative EPS and have an anti-dilutive effect. The value of diluted EPS is always lower than basic value and is more relevant in investment decisions, since it indicates somewhat of a worst-case scenario.

    Quazi Mahbub Hassan

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