EPS Calculator
Calculate Earnings Per Share to assess company profitability and investment value
Calculate Earnings Per Share
Company Financial Data
Total earnings/profit of the company
Dividends paid to preferred shareholders
Number of common shares currently outstanding
EPS Calculation Results
EPS Analysis
Real Company Example
Company Data
Net Income: $3.12 billion
Preferred Dividends: $200 million
Outstanding Shares: 333.4 million
EPS Calculation
1. Adjusted Income: $3.12B - $0.2B = $2.92B
2. EPS: $2.92B ÷ 333.4M = $8.76
Strong earnings per share indicating good profitability
Buyback Scenario
After 50M share buyback:
EPS: $2.92B ÷ 283.4M = $10.30
+17.6% EPS increase from buyback
EPS Benchmarks
Negative
Company losing money
Avoid or high-risk investment
Low
Limited profitability
Growth potential unclear
Moderate
Decent earnings
Stable investment option
Good
Strong performance
Attractive investment
Excellent
Very high earnings
Premium investment
EPS Investment Tips
Look for consistent EPS growth over time
Compare EPS within the same industry
Consider P/E ratio alongside EPS
Monitor share count changes
High EPS doesn't guarantee good investment
Consider forward-looking EPS estimates
Understanding Earnings Per Share (EPS)
What is EPS?
Earnings Per Share (EPS) is a financial metric that indicates how much profit a company has earned for each outstanding share of common stock. It's a key indicator of company profitability and is widely used by investors to evaluate investment opportunities.
Why EPS Matters
- •Measures company profitability per share
- •Enables comparison between companies
- •Used in valuation ratios like P/E
- •Indicates management efficiency
EPS Formula
EPS = (Net Income - Preferred Dividends) ÷ Outstanding Common Shares
Result expressed in dollars per share
- Net Income: Company's total profit after all expenses
- Preferred Dividends: Payments to preferred shareholders
- Outstanding Shares: Common shares currently held by investors
Example: $10M net income ÷ 5M shares = $2.00 EPS
EPS Growth Analysis
- ✓Consistent Growth: Look for 10%+ annual EPS growth
- ✓Quality Growth: Revenue-driven rather than cost-cutting
- ✓Sustainable: Based on business fundamentals
Share Count Impact
- ↗Share Buybacks: Reduce share count, increase EPS
- ↘Share Issuance: Increase share count, dilute EPS
- ⚡Stock Options: Can dilute EPS when exercised
Investment Strategy
- ✓Value Investing: Low P/E with solid EPS growth
- ✓Growth Investing: High EPS growth rates
- ⚠️Quality Check: Verify earnings quality and sustainability