Calculate a company's profitability per outstanding share with our AI-powered financial tool
Earnings Per Share (EPS) is a key financial metric that measures a company's profitability on a per-share basis. It represents the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of a company's financial health and performance.
EPS is widely used by investors to evaluate a company's profitability and to compare the financial performance of companies in the same industry. A higher EPS typically indicates greater profitability and is generally viewed as a positive sign by investors.
Our Earnings Per Share calculator is simple to use:
The formula for calculating Basic Earnings Per Share is:
For Diluted EPS, the formula accounts for all convertible securities:
Our calculator automatically computes both types of EPS based on your input.
Earnings Per Share is one of the most important metrics in financial analysis for several reasons:
EPS shows how much profit a company generates per share, making it easy to compare companies of different sizes.
Investors use EPS to evaluate a company's financial performance and potential for future growth.
EPS is a key component in calculating the Price-to-Earnings (P/E) ratio, a popular valuation metric.
Tracking EPS over time helps investors assess a company's growth trajectory and management effectiveness.
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Earnings per share — EPS — takes a company's total profit and divides it by the number of shares, giving the profit attributable to each single share. That one move makes companies of very different sizes comparable: a giant and a small firm can both be read as “this much profit per share”. Investors watch EPS because it summarises profitability in the unit they actually own, because a rising EPS over successive quarters tells a growth story, and because EPS is the E in the price-to-earnings (P/E) ratio used to judge whether a share looks cheap or expensive. The basic formula is:
Basic EPS = (Net Income − Preferred Dividends) ÷ Weighted Average Outstanding Shares
Preferred dividends are subtracted first because that profit belongs to preferred shareholders — it is not available to the common shareholders whose per-share figure EPS describes. Diluted EPS goes one step further and counts the shares that would exist if convertible securities were converted, which spreads the same profit across more shares and gives the more cautious figure.
A company reports net income of $10,000,000, pays $1,000,000 in preferred dividends, and has 3,000,000 shares outstanding. Basic EPS = (10,000,000 − 1,000,000) ÷ 3,000,000 = $3.00 per share. That is the number to set beside last year's: if the same company earned $2.40 a share a year ago, EPS has grown 25% — the kind of comparison this metric exists for. The diluted figure for the same company would come out lower, because the share count grows when convertible securities are counted; analysts quote both and treat diluted as the conservative read.
Investors use it to compare companies inside one industry, students to practise the ratio before exams, and shareholders to track whether “their” slice of profit is growing. Free, in your browser, with no sign-up.
Related: turn a price and an EPS into a valuation read with the Investment Calculator, work out a profit margin instead with the Margin Calculator, or measure EPS growth from one year to the next with the Percentage Increase Calculator.
Basic EPS = (Net Income − Preferred Dividends) ÷ Weighted Average Outstanding Shares. Diluted EPS uses the same numerator but a share count that also accounts for convertible securities.
Because EPS describes the profit available to common shareholders. Preferred dividends are paid to preferred shareholders first, so they come off the net income before the per-share division.
Basic EPS divides by the shares currently outstanding. Diluted EPS assumes convertible securities are converted into additional shares, so the same profit is spread thinner and the figure is lower — the cautious version. This calculator computes both from your inputs.
There is no universal good number — EPS is meaningful in comparison: against the same company's previous quarters, and against other companies in the same industry. A higher EPS generally indicates more profit per share.