Average Shares Outstanding (Diluted)

What is Average Shares Outstanding (Diluted)?

Average Shares Outstanding (Diluted) is the average number of shares a company has during a period, including all potential shares that could be turned into stocks, like stock options or convertible bonds. It shows the possible total shares if all these were turned into regular shares.

Formula:

Average Shares Outstanding (Diluted)=Average Shares + Potential Shares from Options.