Diluted EPS Explained - Diluted EPS & Diluted Shares Outstanding

Diluted EPS Explained - Diluted EPS & Diluted Shares Outstanding. Diluted EPS is considered a conservative metric because it indicates reduced earnings per share (EPS) when all convertible securities are exercised. Convertible securities include preferred shares, debentures, stock options, and warrants.
What Is the Difference Between Basic EPS and Diluted EPS? Analysts will sometimes distinguish between basic and diluted EPS. Basic EPS consists of the company’s net income divided by its outstanding shares. It is the figure most commonly reported in the financial media and is also the simplest definition of EPS.
Diluted EPS, on the other hand, will always be equal to or lower than basic EPS because it includes a more expansive definition of the company’s shares outstanding. Specifically, it incorporates shares that are not currently outstanding but could become outstanding if stock options and other convertible securities were to be exercised. #TonyDenaro

Due Diligence Links:
1) Investopedia - What is Diluted EPS: https://www.investopedia.com/terms/d/dilutedeps.asp
2) FASB - Diluted EPS: https://asc.fasb.org/260/showallinonepage
3) PWC - Diluted EPS: https://pwc.to/3Ur4kKz
4) Cinemark Q3 2024 Press Release: https://bit.ly/4eg2VgZ
5) Cinemark Q3 2024 10-Q filing: https://bit.ly/3Ysif4u

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DISCLAIMER: Content, strategies and opinions on this channel are for entertainment purposes only. These are Tony's opinions, not specific investment or legal advice for you. Always do your own due diligence, read company filings and financial statements and seek a duly licensed professional for investment, tax or legal advice. Past performance is not a predictor of future results. This is not personalized but rather general educational and informational material.