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Earnings Per Share (EPS) Calculator

Find a company’s earnings per share.

How it is calculated

Earnings per share (EPS) shows how much of a company's profit belongs to each share. The tool uses EPS = net income / shares outstanding, where net income is the profit after tax for the period, in currency, and shares outstanding is the number of shares held by investors. Both must be in the same scale: if you enter income in thousands, shares should not be in units. The shares value must be greater than zero. Because the tool takes a single share count, it gives a simple EPS; analysts often use a weighted-average share count over the year, and a diluted EPS adds options and convertibles, which this tool does not do. Preferred dividends should be deducted from income first if they exist.

Worked example

A company reports a net income of 2,500,000 over the year and has 1,000,000 shares outstanding. EPS = 2,500,000 / 1,000,000 = $2.50 per share. If an investor holds 400 shares, their share of the year's profit is 400 × 2.50 = 1,000. If the share price is 25, the price-to-earnings ratio that follows from this EPS is 25 / 2.50 = 10.

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Common mistakes

  • Mixing units, such as net income in millions and shares in units, which makes EPS wrong by a factor of 1,000,000.
  • Using operating profit or revenue instead of net income after tax and interest.
  • Forgetting to deduct preferred dividends first, which overstates EPS for common shareholders.
  • Using the share count at year-end for a company that issued or bought back many shares, when a weighted average fits the period better.
  • Comparing EPS across companies without looking at share price or growth; EPS alone does not say which stock is cheaper.

Sources

About this calculator

This calculator finds earnings per share by dividing the net income available to common shareholders by the number of shares outstanding. Enter net income after preferred dividends — that part belongs to preferred shareholders, not common ones — and, for a year in which the share count changed, the weighted average number of shares.

It's used by individual investors and equity analysts evaluating a company's profitability on a per-share basis, most often as an input to the price-to-earnings ratio when deciding whether a stock looks cheap or expensive relative to its earnings.

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Comments (1)

  • Editorial team

    This tool divides net income by one share count, and it does not subtract preferred dividends, so take those off the income yourself before typing it in if the company has preferred stock. Check whether the profit includes a one-off item such as an asset sale; an EPS inflated by it will make the resulting P/E look misleadingly low. After a split, match the share count to the period. Which company are you looking at, and where did you take the share count?

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