EPS Calculator

EPS (Earnings Per Share) is a measure of a company's profitability allocated to each outstanding common share. It is calculated by subtracting preferred dividends from net income and dividing by the weighted average number of common shares outstanding. A higher EPS generally indicates greater profitability.

The basic EPS formula is: EPS = (Net Income – Preferred Dividends) / Weighted Average Common Shares Outstanding. Preferred dividends are subtracted because they are not available to common shareholders. The result tells you how much profit each common share has effectively 'earned'.

Basic EPS uses only the actual weighted average common shares outstanding. Diluted EPS also accounts for potential shares that could be created from stock options, warrants, and convertible securities — making it a more conservative and comprehensive measure. Diluted EPS is always equal to or lower than basic EPS.

Public companies are required to report both basic and diluted EPS directly on their income statement, typically at the bottom below net income. You can also find historical EPS figures in a company's annual report (10-K), financial data platforms like Bloomberg, or financial summary pages on sites like MSN Money.

Yes. Stock buybacks reduce the number of shares outstanding, which increases EPS even if net income stays the same. Conversely, new share issuances increase shares outstanding and dilute EPS. This is why companies often buy back shares as a way to boost their reported EPS.

A stock split increases the number of shares outstanding proportionally while reducing the share price. To ensure comparability, historical EPS figures are retroactively adjusted to reflect the new share count, so a stock split does not actually change the underlying economic value of EPS.

There is no universal 'good' EPS — it depends heavily on the industry, company size, and growth stage. More important than the absolute value is the trend: consistently growing EPS over multiple years signals a company that is increasing profitability. Comparing EPS to peers in the same sector provides the most meaningful context.

Preferred dividends are paid to preferred shareholders before any earnings are distributed to common shareholders. Since EPS measures the profit attributable to common shareholders specifically, preferred dividends must be deducted from net income before dividing by common shares outstanding.