Earnings per share adjusted for the existence of options and convertible securities.
net income divided by the weighted average number of shares outstanding during a time period, assuming any securities or other contracts to issue common stock, including options and warrants, were exercised or converted into common stock. This method of calculation is required by the Financial Accounting Standards Board for all years that end after December 15, 1997.
Earnings per share, including common stock, preferred stock, unexercised stock options, and some convertible debt. Diluted earnings per share are usually a more accurate reflection of the company's real earning power. see also primary earnings per share, basic earnings per share.