This figure can be found on the income statement. Next, determined the amount of preferred dividends paid. Identify the net income of the company over the relevant fiscal period. Basic Earnings Per Shareīegin with the income statement.
Lets look at how to calculate the Basic Earnings Per Share and the Diluted Earnings Per Share amounts. To calculate the EPS of any company, one needs to extract data from balance sheet and income statement. Back to: INVESTMENTS TRADING & FINANCIAL MARKETS How to Calculate a Company's Earnings Per Share? The higher the Earning per Share (EPS), the more equity holders will benefit. The EPS is an indication of a company's profitability. Investors who want to invest in equity are interested in company's EPS. Note: Most publicly traded companies do not have preferred shares, pursuant to SEC regulations or exchange rules.When calculating the earnings per share, you are calculating the earnings per share of common stock. Preferred shareholders receive preferential payments before common shareholders are paid. It is calculated by deducting preferred dividends from net income and then dividing that number of outstanding common shares. Update Table of Contents What are Earnings Per Share? How to Calculate a Company's Earnings Per Share? Basic Earnings Per Share Diluted EPS Academic Research on Earnings Per Share What are Earnings Per Share?Įarnings per share (EPS) is an accounting measure.