Earnings Per Share Calculator
Calculate a company's earnings per share (EPS) from net income, preferred dividends, and outstanding shares.
Understanding EPS
Earnings per share (EPS) is one of the most widely followed metrics in stock analysis. It shows how much profit a company generates for each share of common stock. Investors use EPS to compare profitability across companies and to calculate the price-to-earnings (P/E) ratio.
Basic EPS subtracts preferred dividends from net income (since those profits belong to preferred shareholders first) and divides by the weighted average number of common shares outstanding during the period.
Frequently Asked Questions
What is EPS?
Earnings per share measures a company's net profit allocated to each outstanding share of common stock. It is a key indicator of profitability and is used by investors to value stocks, compare peers, and track growth over time. Higher EPS generally signals better profitability.
How do you calculate EPS?
Take the company's net income, subtract any preferred dividends, then divide by the weighted average number of common shares outstanding. The formula is: EPS = (Net Income - Preferred Dividends) / Weighted Average Shares. You can find all these figures in the company's income statement and financial filings.
What is the basic EPS formula?
Basic EPS = (Net Income - Preferred Dividends) / Weighted Average Common Shares Outstanding. This is different from diluted EPS, which also accounts for potential shares from stock options, convertible bonds, and warrants. Diluted EPS is always equal to or lower than basic EPS.