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Earnings Per Share (EPS) shows how much profit is attributable to each individual share of common stock — one of the most widely reported and watched metrics in public company earnings reports.
How it works
Enter net income, preferred dividends (paid to preferred shareholders before common shareholders get anything), and the weighted average number of common shares outstanding during the period. The calculator applies EPS = (Net Income − Preferred Dividends) ÷ Weighted Average Shares Outstanding.
- Enter net income ($).
- Enter preferred dividends ($).
- Enter weighted average shares outstanding.
- Click Calculate to see your results.
Examples
Accounting for preferred dividends first
A company with $1,000,000 of net income, $100,000 of preferred dividends, and 900,000 weighted average common shares has an EPS of exactly $1.00 — preferred shareholders are paid first, and what remains is divided among common shares.
Who should use it
- Analyzing a public company's per-share profitability.
- Investment analysis and equity research.
Industry applications
- Investment analysis and equity research
- Corporate finance and investor relations
Advantages
- One of the most widely reported and compared profitability metrics for public companies.
- Correctly accounts for preferred dividends before dividing among common shares.
Limitations
- This is basic EPS only — doesn't account for potential dilution from options, warrants, or convertible securities.
Common mistakes to avoid
- Using net income directly without subtracting preferred dividends first, when preferred shares exist.
- Using a single point-in-time share count instead of a genuine weighted average when shares outstanding changed during the period.
Best practices
- Use a true weighted average share count if shares were issued or repurchased during the period, not just the ending balance.
- Remember this calculates basic EPS — diluted EPS (accounting for convertible securities, options, etc.) is a separate, more conservative calculation not covered here.
Tips
- If a company has convertible securities, stock options, or warrants outstanding, remember basic EPS (this calculator) will be higher than diluted EPS, which accounts for those potential additional shares.