This diluted earnings per share (EPS) template is a very helpful tool for investors and analysts. Diluted earnings per share (EPS) is the earnings attributed to each diluted shares outstanding, which includes all common shares, the exercise of in-the-money options, warrants, and other dilutive securities. The formula for calculating diluted EPS is as follows: Diluted EPS = (Net Income - Preferred Dividends) / (Weighted Average Number of Shares Outstanding + Conversion of All In-The-Money Options, Warrants, and Other Dilutive Securities) Investors and analysts often calculate the diluted EPS to see how much earnings a common shareholder is entitled to when dilutive securities are converted into shares. It is a more accurate number than the basic EPS because it takes into account the dilution of shares after the conversion. If you’d like to see more examples in addition to this diluted earnings per share (EPS) template, make sure to check all the Financial Model templates on CFI Marketplace.