Earnings Per Share (EPS) Calculator

Calculate earnings per share to measure company profitability on a per-share basis.

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Earnings Per Share (EPS) is a financial metric that measures the amount of net income attributable to each outstanding share of common stock.

EPS is calculated by dividing net income by the number of outstanding shares. It represents the portion of a company’s profit allocated to each share of stock, making it easier to compare profitability across companies of different sizes.

A higher EPS generally indicates greater profitability on a per-share basis. EPS is one of the most widely used metrics in financial analysis and is a key component in calculating other important ratios like the price-to-earnings (P/E) ratio.

EPS is crucial for investors as it provides a standardized measure of company profitability that can be easily compared across different companies and time periods. It helps assess the value created for shareholders and is often used in investment decision-making.

Earnings Per Share (EPS) Formula

\begin{gather*}\bold{Given{:}}\newline\begin{aligned}\text{Net Income} &= \mathrm{NI}\newline\text{Outstanding Shares} &= \mathrm{S}\end{aligned}\newline\bold{Calculate{:}}\newline\text{Earnings Per Share} = \mathrm{EPS} \newline = \frac{\mathrm{NI}}{\mathrm{S}}\end{gather*}

Earnings Per Share (EPS) Calculation Examples

Example 1

A company reports net income of $500,000 with 100,000 outstanding shares.

Let's calculate the earnings per share for this company:

\begin{gather*}\bold{Given{:}}\newline\begin{aligned}\text{Net Income}\space(\mathrm{NI}) &= \mathrm{{\$}500{,}000}\newline\text{Outstanding Shares}\space(\mathrm{S}) &= 100{,}000\end{aligned}\newline\bold{Calculate{:}}\newline\text{Earnings Per Share}\space(\mathrm{EPS})\newline\begin{aligned}&= \frac{\mathrm{NI}}{\mathrm{S}}\newline&= \frac{\mathrm{{\$}500{,}000}}{100{,}000}\newline&= \mathrm{{\$}5}\end{aligned}\end{gather*}

This indicates that the earnings per share for the company is $5, meaning that each share generates $5 in earnings for shareholders.

Example 2

A technology firm has net income of $250,000 and 50,000 outstanding shares.

Let's calculate the EPS for this technology firm:

\begin{gather*}\bold{Given{:}}\newline\begin{aligned}\text{Net Income}\space(\mathrm{NI}) &= \mathrm{{\$}250{,}000}\newline\text{Outstanding Shares}\space(\mathrm{S}) &= 50{,}000\end{aligned}\newline\bold{Calculate{:}}\newline\text{Earnings Per Share}\space(\mathrm{EPS})\newline\begin{aligned}&= \frac{\mathrm{NI}}{\mathrm{S}}\newline&= \frac{\mathrm{{\$}250{,}000}}{50{,}000}\newline&= \mathrm{{\$}5}\end{aligned}\end{gather*}

This calculation shows that the earnings per share for the technology firm is $5, representing the profit allocated to each outstanding share.

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