Earnings Per Share (EPS) Calculator (with Examples)

💰 If you’ve ever looked at a company’s stock and wondered, “Is it making money?” — that’s where Earnings Per Share (EPS) comes in!

EPS is a key financial metric that tells you how much profit a company makes for each share of its stock. It’s simple to calculate and super useful for investors.

Let’s walk through it step by step!

⚙️ EPS Calculator

Enter the Net Income, Dividend Payments to preferred shareholders and the average number of regular shares held by investors. The tool will calculate Earnings per share.

🙋 What is EPS?

EPS stands for Earnings Per Share. It shows how much of a company’s net income (profit) is assigned to each outstanding share of stock.

In plain English:

It tells you how much money the company is making per share that investors own.

🧮 EPS Formula

Here’s the basic formula:

EPS = (Net Income - Preferred Dividends) ÷ Average Outstanding Shares

Where:

• Net Income = Total profit after taxes and expenses
• Preferred Dividends = Payments to preferred shareholders (if any)
• Average Outstanding Shares = The average number of regular shares held by investors

✅ Example

Let’s say:

• Net Income = $5,000,000
• Preferred Dividends = $500,000
• Outstanding Shares = 1,000,000

Step-by-step:

EPS = (5,000,000 - 500,000) ÷ 1,000,000
EPS = 4.5

🎉 So, the Earnings Per Share is $4.50. That means the company earned $4.50 for each share of stock.

✨ Why EPS Matters

EPS is one of the most important indicators of a company’s profitability. Investors use it to:

• Compare companies in the same industry
• Track a company’s growth over time
• Help determine stock value

A higher EPS often means the company is more profitable, but always compare it with others in the same sector for better context.

🔍 Types of EPS

📝 Quick Recap

EPS = (Net Income - Preferred Dividends) ÷ Average Outstanding Shares

It’s a simple way to check how profitable a company is per share.

🔁 Related Posts

• Diluted EPS Calculator