What is the difference between Basic weighted and Diluted weighted average common shares outstanding?



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what is below terms mean? Why we have two types of outstanding shares?

Basic weighted average common shares outstanding
Diluted weighted average common shares outstanding

1 Answer(s)


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When it comes to shares there are those that have been issued as shares to the public and that comes under "Basic weighted average".

Then there are shares that are issued as options to investors, employees etc. These have not been converted to shares yet and the holder has an option to convert the options into shares. "Diluted" number includes these options assuming that the options have been converted.