Earnings Per Share (EPS) Calculation Definition, Formulae

Earnings Per Share is the portion of a company's profit that is allocated to every individual share of the stock.

Our Calculator used the following formulas

1. If no preferred stock is outstanding

    Basic EPS = Net Income / Weighted Average Number of Common Shares Outstanding

2. If preferred stock is outstanding

    Basic EPS = (Net Income - Preferred Dividends) / Weighted Average Number of Common Shares Outstanding

Example

Mymathtables.com has Net Income(I) during the year 2019 of $50,000 .

Since it is a small company, there are no preferred shares outstanding.

Mymathtables.com had 5,000 weighted average shares outstanding (or) Number of Shares Outstanding(S) during the year 2019.

Mymathtables.com EPS is calculated as follows:

EPS formula = ( Net Income(I) - Preferred Dividends (D) ) / Number of Shares Outstanding(S)

$10 = ( $50,000 - $0 ) / $5,000

This means that if Mymathtables.com distributed every dollar of income to its shareholders, each share would receive 10 dollars.