basic earnings per share

basic earnings per share definition - finance
Earnings per share that are calculated without taking into account stock options, warrants, and convertible debt. If a company has a large amount of those financial instruments outstanding, then diluted earnings per share provides a better measurement of the earnings that should be allocated to each share of stock. The diluted earnings per share calculation includes stock options, warrants and convertible debt. Typically, companies report both basic earnings per share and diluted earnings per share.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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