Earnings Per Share Calculator

Formula

The formula to calculate the earnings per share is:

\[ EPS = \frac{NI - DPS}{OCS} \]

Where:

$EPS$ is the earnings per share
$NI$ is the net income (total profit of the company, not total revenue)
$DPS$ is the dividends on preferred stocks
$OCS$ is the outstanding common shares (current or average number)

What is Earnings Per Share?

Earnings per share, or EPS for short, is the total income after dividends per common stock. This metric is used to measure a company's profitability and is important for investors to assess the financial health of a company.

Example Calculations

Example 1:

Net Income (NI): $100,000
Dividends on Preferred Stocks (DPS): $10,000
Outstanding Common Shares (OCS): 50,000

Using the formula:

\[ EPS = \frac{100000 - 10000}{50000} = 1.80 \text{ \$} \]

Example 2:

Net Income (NI): $200,000
Dividends on Preferred Stocks (DPS): $20,000
Outstanding Common Shares (OCS): 100,000

Using the formula:

\[ EPS = \frac{200000 - 20000}{100000} = 1.80 \text{ \$} \]