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Earnings Per Share Calculator

Enter the net income, dividend, and common shares in the fields, and the calculator will determine the earnings per share

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Earnings Per Share (EPS) Calculator

The Earnings Per Share (EPS) Calculator helps determine a company's profitability by dividing its net income by the number of outstanding common shares. EPS is a key indicator used by investors to assess a company's financial performance.

What is EPS?

EPS is the ratio of a company’s net profit to the number of its common shares outstanding. It indicates how much profit is attributed to each share, helping investors compare profitability across companies.

How to Calculate EPS

The formula for calculating EPS is:

EPS = (Net Income – Dividends on Preferred Stock) / Average Outstanding Common Shares

Definitions:

Net Income: Total earnings (profit) of the company.
Dividends on Preferred Stock: Payments made to preferred shareholders, who have priority over common shareholders.
Average Outstanding Common Shares: Total number of common shares currently held by shareholders.

Practical Example

Suppose a company has a net income of $3.12 billion, pays $200 million in dividends to preferred shareholders, and has 333.4 million outstanding common shares. The EPS can be calculated as follows:

EPS = (Net Income – Dividends on Preferred Stock) / Average Outstanding Common Shares

EPS = ($3,120,000,000 – $200,000,000) / 333,400,000 = $8.76

This means each common share earns $8.76 of the company’s profit.

Applications of EPS

Evaluating a company’s overall value and profitability
Identifying potential investment opportunities
Analyzing growth trends of a company
Calculating Return on Investment (ROI)

How the EPS Calculator Works

Input:

Enter Net Income
Enter Dividends on Preferred Stock
Enter the number of Outstanding Common Shares
Click “Calculate”

Output:

Earnings Per Share (EPS)

FAQs

What are Preferred Stocks?

Preferred stock is a type of equity that gives shareholders priority over common shareholders in receiving dividends and assets in the event of liquidation.

What are Common Stocks?

Common stock represents ownership in a company. Shareholders can claim profits via dividends and usually have voting rights. EPS is calculated using the number of outstanding common shares.

What is Dividend Yield?

Dividend yield is a financial ratio showing the annual dividend paid per share relative to the share price. It indicates the return investors receive from dividends.

References

Investopedia: EPS Definition and Calculation
Wall Street Prep: Earnings Per Share (EPS)

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