EPS Calculator
Calculate earnings per share (EPS) from net income, preferred dividends and weighted-average shares outstanding.
How it works
EPS = (net income − preferred dividends) ÷ weighted-average shares outstanding
Earnings per share slices a company’s profit down to a single share, making it the building block of the P/E ratio and a headline figure every quarter. Preferred dividends are subtracted first because that profit belongs to preferred holders, not common shareholders. Companies use a weighted-average share count so that stock issued or bought back partway through the year is counted for the fraction of the period it existed.
Worked example
A company earns $10,000,000,000 in net income, owes no preferred dividends and has 5,000,000,000 weighted-average shares. EPS is (10,000,000,000 − 0) ÷ 5,000,000,000 = $2.00 per share.
Frequently asked questions
What is the difference between basic and diluted EPS?
Basic EPS uses the current share count. Diluted EPS also counts shares that could be created by options, warrants and convertibles, giving a more conservative figure that shows the effect of potential dilution.
Why subtract preferred dividends?
EPS measures earnings available to common shareholders. Preferred dividends are a prior claim on profit, so they are removed before dividing by the common share count.
Why use weighted-average shares?
The share count changes during the year as companies issue or repurchase stock. Weighting by the time each share was outstanding avoids overstating or understating the per-share figure.
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Educational estimate, not investment advice. Ratios and valuation models are simplifications; verify figures against official filings and consult a licensed advisor before investing.