Earnings Per Share Calculator
Calculate earnings per share (EPS) from net income, preferred dividends and shares outstanding, a core measure of company profitability.
Last reviewed by the Radiatus Cloud team
Calculate earnings per share, a core measure of a company\u2019s profitability per share.
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Calculate earnings per share
Earnings per share, or EPS, measures the portion of a company's profit allocated to each outstanding share of common stock. It is calculated by subtracting any preferred dividends from net income and dividing the result by the number of common shares outstanding. Preferred dividends are removed because that profit belongs to preferred shareholders, not common shareholders. A company earning five million with two million shares and no preferred dividends has an EPS of two dollars and fifty cents.
EPS is one of the most widely reported figures in company results because it expresses profitability on a per-share basis that investors can compare directly.
How investors use EPS
Earnings per share is a building block for many other metrics, most notably the price-to-earnings ratio, which divides the share price by EPS to gauge valuation. Rising EPS over time generally indicates improving profitability, and companies are often judged on whether they beat or miss EPS expectations. Because EPS depends on share count, events like share buybacks can raise it even without a rise in total profit.
This calculator computes basic EPS; diluted EPS additionally accounts for options and convertible securities that could increase the share count. Compare EPS across periods for the same company rather than between companies of different sizes. All calculation happens locally in your browser.
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Frequently Asked Questions
What is the EPS formula?
EPS equals net income minus preferred dividends, divided by the number of common shares outstanding.
Why subtract preferred dividends?
That profit is owed to preferred shareholders, so it is removed to find the earnings attributable to common shareholders.
What is the difference between basic and diluted EPS?
Basic EPS uses current shares, while diluted EPS also counts shares that could be created by options and convertibles, giving a more conservative figure.
How does EPS relate to the P/E ratio?
The price-to-earnings ratio divides the share price by EPS, so EPS is a key input for judging whether a stock is expensive or cheap.
Can buybacks raise EPS?
Yes. Buying back shares reduces the share count, which can increase EPS even if total net income stays the same.
Privacy & Security
Everything runs in your browser; nothing is uploaded.
How to Use
Enter net income, preferred dividends and shares outstanding.
Disclaimer: This tool is provided "as is" without warranty of any kind. Results are for educational and utility purposes.
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