Earnings Per Share (EPS) Calculator

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.

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.