It is computed by dividing net income less preferred dividend by the number of shares of common stock outstanding during the period. Earnings per share is important to investors because it breaks down a company s profits on a per share basis which is especially useful for tracking performance over long time periods.

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Trailing earnings per share eps is the sum of a company s earnings per share for the previous four quarters.

Earning per share formula. Earning per share eps also called net income per share is a market prospect ratio that measures the amount of net income earned per share of stock outstanding. Profit or loss attributable to common equity holders of the parent business weighted average number of common shares outstanding during the period. Earnings per share serve as an indicator of a company s profitability.

The formula for earnings per share or eps is a company s net income expressed on a per share basis. Earnings per share eps net income of the company dividend to preferred shareholders average outstanding shares of the company. As you can see in the excel screenshot below if abc ltd has a net income of 1 million dividends of 0 25 million and shares outstanding of 11 million the earnings per share formula is 1 0 25 11 0 07.

Next enter the total net income. In other words this is the amount of money each share of stock would receive if all of the profits were distributed to the outstanding shares at the end of the year. It is important to note that the earnings per share formula only references common stock and any preferred stock dividends is subtracted from the net income if applicable.

The formula for basic earnings per share is. Earnings per share eps is calculated as a company s profit divided by the outstanding shares of its common stock. Follow the next steps to determine the earnings per share.

Earnings per share eps 10 0 50 million 5 million. Earnings per share eps ratio measures how many dollars of net income have been earned by each share of common stock during a certain time period. The resulting number serves as an indicator of a company s profitability.

First choose the currency you wish to use optional. Net income for a particular company can be found on its income statement. Earnings per share eps is the portion of a company s profit allocated to each outstanding share of common stock.

Finally enter the weighted average number of common shares outstanding and then click the. Next input the amount of preferred stock dividends. Earnings per share eps 1 90.