Diluted earnings per share

Okay kiddo, let me break it down for you. Companies make money by selling things or providing services to people. When we say "earnings," we're talking about the money that the company has made.

Now, let's talk about shares. Shares are little pieces of the company that people can buy. When you buy a share, you own a tiny piece of the company. Companies have different numbers of shares, depending on how big they are and who owns them.

When a company makes money, it's important to figure out how much money each share is worth. This is where "earnings per share" (EPS) comes in. EPS tells us how much money the company has made for each share that exists.

But sometimes, things get a little more complicated. Sometimes, companies issue more shares or have options that let people buy more shares. When that happens, the EPS number can change. If the EPS number goes down because there are more shares, we call that "diluted earnings per share."

So, to sum it up, diluted earnings per share is a fancy phrase that tells us how much money a company has made for each share, but takes into account any extra shares that might exist because of things like stock options.