EPS Calculator
Calculate earnings per share (EPS) from a company's net income and shares outstanding. Optionally subtract preferred dividends and enter a share price to see the P/E ratio. EPS is a fundamental metric used to evaluate a company's profitability on a per-share basis.
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Educational purposes only.
This calculator provides estimates for educational purposes. EPS values should be compared within the same industry and alongside other financial metrics. This is not financial advice.
Educational purposes only. These calculators illustrate concepts and do not constitute investment advice. Read our disclaimer
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</p>What is EPS?
Earnings per share is a company's net income divided by its share count, expressed as profit attributable to each share. Because it is a per-share figure, it lets companies of very different sizes be compared on the same scale, and it forms the denominator of the price-to-earnings ratio.
The formula
EPS = (Net income − Preferred dividends) ÷ Weighted average shares outstanding- Net income = profit after tax
- Preferred dividends = subtracted because they are not available to common shareholders
- Weighted average shares = share count averaged across the period, not the closing count
A company reports $500 million of net income, pays $20 million in preferred dividends and has a weighted average of 240 million shares. EPS is (500 − 20) ÷ 240 = $2.00. Using the year-end share count instead of the weighted average would misstate the figure whenever shares were issued or repurchased mid-period.
Basic and diluted EPS
Basic EPS uses only shares currently outstanding. Diluted EPS also counts everything that could become a share (employee stock options, restricted stock units, convertible bonds and convertible preferred stock) as though it had already converted.
Diluted EPS is therefore always equal to or lower than basic, and the gap measures how much existing holders would be diluted if those instruments converted. A company with heavy option issuance can show a materially lower diluted figure, which is why it is the more conservative number and the one usually compared across periods.
| Measure | Share count | EPS |
|---|---|---|
| Basic | 240m | $2.00 |
| Diluted | 260m | $1.85 |
| Dilution | +20m (8.3%) | −$0.15 (−7.5%) |
Hypothetical figures chosen to show the mechanic.
Why EPS can rise while profit does not
Because it is a ratio, it moves when either the numerator or the denominator changes. A company that repurchases shares reduces the denominator, and EPS rises even if net income is flat.
Take $500 million of net income across 250 million shares: EPS is $2.00. Buy back 10% of the shares and the same $500 million spreads across 225 million, giving $2.22, an 11% increase with no improvement in the business. This is why EPS growth is usually read alongside revenue and net income growth rather than on its own.
Trailing, forward and adjusted
Trailing twelve months (TTM) EPS sums the last four reported quarters. It is actual reported data, but it describes a period already finished.
Forward EPS is an estimate for the coming period, usually a consensus of analyst forecasts. It is an opinion, not a reported figure, and it changes as estimates are revised.
Adjusted or non-GAAP EPS excludes items management considers non-recurring — restructuring charges, acquisition costs, and often stock-based compensation. It is not standardized, so two companies' adjusted figures are not necessarily comparable, and the gap between GAAP and adjusted EPS is itself informative.
- TTM: reported, backward-looking, comparable across companies
- Forward: estimated, changes with revisions, not a reported fact
- Adjusted / non-GAAP: excludes items chosen by management, not standardized
What EPS cannot tell you
EPS says nothing about how much capital produced the earnings. Two companies can report identical EPS while one used twice the equity to do it, which is what return on equity measures and EPS does not.
It also ignores debt. A company can raise earnings by borrowing to fund operations or buybacks, which lifts EPS while increasing financial risk that the per-share figure does not show.
And because it is an accounting measure, it can diverge from cash. Non-cash charges such as depreciation and impairments reduce EPS without any money leaving, which is why it is commonly read next to free cash flow per share.
What this calculator does not account for
- The share count entered is treated as the weighted average for the period. Using a point-in-time count misstates EPS whenever shares were issued or repurchased.
- No distinction is made between GAAP and adjusted net income: the result reflects whichever figure is entered.
- Preferred dividends must be subtracted from net income before entry if the company has preferred stock outstanding.
- The result is basic EPS unless a diluted share count is supplied.
- A single period is shown. EPS is most informative as a trend across several.
EPS is the denominator of the price-to-earnings ratio, so the P/E calculator takes this output and compares it against the share price. P/E Ratio Calculator
How It Works
Enter net income
The company's total profit after all expenses, found on the income statement.
Enter shares outstanding
Total number of shares held by all shareholders, found on the balance sheet or financial data sites.
Add optional fields
Preferred dividends (subtracted from net income) and share price (to calculate P/E ratio).
Review your results
See basic EPS, optional P/E ratio, and a plain-language explanation of the numbers.
Frequently Asked Questions
Earnings per share (EPS) is a financial metric that shows how much profit a company earns for each outstanding share of common stock. It is calculated by dividing net income (minus preferred dividends) by the total number of shares outstanding. EPS is a standard indicator for evaluating a company's profitability.
Basic EPS uses only the current number of shares outstanding. Diluted EPS accounts for all potential shares that could be created from stock options, convertible bonds, warrants, and other dilutive securities. Diluted EPS is always equal to or lower than basic EPS because it assumes more shares in the denominator. This calculator computes basic EPS.
There is no universal "good" EPS because it varies widely by industry, company size, and growth stage. A meaningful way to evaluate EPS is to compare it to previous quarters (is it growing?), competitors in the same industry, and analyst expectations. Consistent EPS growth over time is generally viewed as a positive sign of financial health.
Yes. A negative EPS means the company reported a net loss for the period. This is common for startups, companies in turnaround situations, or businesses investing heavily in growth. A negative EPS does not necessarily mean the company is failing, but it does indicate that the company spent more than it earned during that period.
Revenue (or sales) is the total money a company brings in before any expenses. EPS reflects the bottom line — what remains after subtracting all costs, taxes, interest, and preferred dividends, divided by shares outstanding. A company can have high revenue but low or negative EPS if its expenses are high. EPS measures profitability per share, while revenue measures total sales volume.