Earnings Per Share Calculator

More about the Earnings Per Share so you can better use the results provided by this solver. The Earnings Per Share \((EPS)\) is the ratio of net income to number of shares outstanding. This ratio is a market value measure, and it indicates how many dollars in net income a firm produces for each outstanding share.

How do you calculate earnings per share?

In order to compute the earnings per share you will need to know the net income and the number of shares outstanding. You can compute the EPS using the formula below:

\[ \text{EPS} = \displaystyle \frac{\text{Net Income}}{\text{Number Shares Outstanding}}\]

Example of earnings per share

Question: Suppose that the net income is $3000, and there are 5000 shares outstanding. Compute earnings per share.

Solution:

This is the information we have been provided with:

Net Income =	\(3000\)
Number of Shares outstanding =	\(5000\)

The earnings per share \((EPS)\) is computed using the following formula:

\[ \begin{array}{ccl} EPS & = & \displaystyle \frac{\text{Net Income}}{\text{Number of Shares Outstanding}} \\\\ \\\\ & = & \displaystyle \frac{\text{\textdollar}3000}{5000} \\\\ \\\\ & = & 0.6 \end{array} \]

Therefore, the earnings per share for the given net income of \(\text{\textdollar}3000\) and shares outstanding equal to \(5000\) are \(EPS = 0.6\). This means the company generates earnings of \(\text{\textdollar}0.6\) for each outstanding share.