This earnings per share calculator serves as an indicator of a company’s profitability. So, use our EPS calculator to handle the profitability of a company depending on net income, preferred dividends, and the number of outstanding common shares.
“Earning per share is a financial measuring term that indicates how much a company makes a profit per share of its common stock”.
It is a widely used metric to analyze the performance and profitability of different companies. A higher EPS shows that a company generates more profit and that its stock is worth more while a low EPS value indicates a company has a high debt load.
Our earnings per share calculator is an accurate and reliable tool for investors, analysts, and anyone else who needs to calculate EPS. To understand how EPS is calculated view the formula below:
Earning Per Share (EPS) = Net Income - Dividends / Common Shares
Where:
It is important to note that generated revenue per share can be determined for different periods of time by taking into service the earnings per share calculator. Let us examine an example that describes the purpose of a tool in a better way.
Suppose a Digital Marketing which assumes the following financial details:
Our earning per share calculator demonstrates how to determine EPS by starting with net income, adjusting for any preferred dividends, and then dividing by the average outstanding common shares.
Step # 1 _ Calculate Earnings for Common Shareholders:
Earnings for Common Shareholders = Net Income - Preferred Dividend $$
= $500,000 - $50,000
= $450,000 $$
Step # 2 _ Calculate Earnings Per Share (EPS):
Earnings per share calculation utilizes the following formula:
EPS = Earnings for Common Shareholders / Average Outstanding Common Shares
= $450,000 / $200,000
= $2.25
The EPS calculator allows you to determine the EPS for any company, public or private fast and accurately! Providing the following values is required to make it work:
Basic EPS provides a conservative measure of earnings per share without considering the impact of potential dilution while on the other side, diluted EPS indicates a more conservative measure that accounts for the potential dilution in the company's shares.
EPS serves as a fundamental metric to monitor the profitability of a company. As EPS increases there is also consequently the higher demand for company shares which causes the stock price to rise, and vice versa
Wikipedia: Earnings per share, calculations, Diluted earnings per share,
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