How is EPS Calculated - EPS Formula and Example With the Earnings Per Share meaning clarified, let us take a look at the mathematical formula for its calculation: EPS = (Net income - Preferred dividends) / Average outstanding shares Let us understand the EPS calculation with the help of an example. Definition Formula Types of EPS Basic vs Diluted Limitations What Is a Good EPS ? P/E and EPS Takeaway Earnings per share , or EPS , is a simple calculation that shows how much profit a company can generate per share of its stock. It's calculated by dividing earnings by outstanding shares, which you can do either quarterly or annually, like so: EPS = total earnings / outstanding shares EPS is one of the most critical metrics impacting a stock's price. When EPS increases year-over-year, the ... Learn how to calculate earnings per share , understand the difference between basic and diluted EPS , and see how finance teams use it to track profitability. Earnings per share (EPS ) measures a company's profit per share of common stock. Learn what EPS means, how to calculate it, and why it matters to investors.
