The Weighted Average Shares Outstanding Diluted is the average number of shares of a company, adjusted for changes in the share count throughout the year and accounting for potential dilution from options, convertible securities, and other sources. It is used in the calculation of diluted earnings per share (EPS).
While the simple definition gives an overview, let's delve deeper. The Weighted Average Shares Outstanding Diluted refers to the average number of shares over a particular accounting period, considering changes in the number of shares due to new issuances or share buybacks.
The diluted part comes into play when companies have issued options, convertible securities, or other potential sources of additional shares. These are included as they can potentially dilute the earnings per share (EPS), as more shares are added to the outstanding share pool.
This metric is a key component in calculating the diluted earnings per share (EPS), a key financial ratio that investors and analysts use to assess a company's profitability per outstanding share of common stock.
Apple's Weighted Average Shares Outstanding Diluted would be calculated by taking the average of the number of shares at the beginning and end of the period, and also adding in any potentially dilutive shares from employee stock options or other convertible securities.
For Tesla, the calculation would include shares outstanding at the start and end of the period, plus any potential additional shares that could come from convertible bonds or options.
For Amazon, the Weighted Average Shares Outstanding Diluted is calculated by averaging the number of shares at the beginning and end of the period, and also accounting for potentially dilutive shares from employee stock options or other convertible securities.