# EPS Calculator – Earnings per Share

URL: https://speedycalculator.com/calculators/finance/eps/
Last updated: 2026-10-25

> The EPS calculator works out a company's basic earnings per share – net income minus preferred dividends divided by the weighted average shares – and diluted EPS including options and convertibles.

## Inputs

- Net income
- Preferred dividends
- Weighted average common shares
- Dilutive securities (options, convertibles)
- Share price (for P/E)

## Results

- Basic EPS
- Diluted EPS
- P/E ratio (basic)

## Formula

```
Basic EPS = (net income − preferred dividends) ÷ weighted average common shares
Diluted EPS = (net income − preferred dividends) ÷ (shares + dilutive securities)
```

## Explanation

EPS is the profit attributable to each common share and the basis of the P/E ratio. Diluted EPS assumes stock options and convertible securities are exercised, so it is lower or equal to basic EPS.

### How to use the EPS Calculator – Earnings per Share

- **Net income**
- **Preferred dividends**
- **Weighted average common shares**
- **Dilutive securities (options, convertibles)**
- **Share price (for P/E)**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter net income, preferred dividends, the weighted average shares and any dilutive shares.

### Tips

- Take figures from the same financial statements and the same fiscal year.
- Compare ratios with companies in the same industry, not across industries.
- Use several valuation measures together; no single ratio tells the whole story.
- Market prices change every second – refresh the share price before you rely on a result.

### Common mistakes to avoid

- Mixing per-share figures with company totals.
- Using trailing earnings for one company and forward earnings for another.
- Forgetting dilution from options and convertible securities.

### Inputs explained

FieldWhat to enterNet incomeAmount in your currencyPreferred dividendsAmount in your currencyWeighted average common sharesA numberDilutive securities (options, convertibles)A numberShare price (for P/E)Amount in your currency

### What each result means

- **Basic EPS** = ([Net income] - [Preferred dividends])÷[Weighted average common shares]
- **Diluted EPS** = ([Net income] - [Preferred dividends])÷([Weighted average common shares] + [Dilutive securities (options, convertibles)])
- **P/E ratio (basic)** = [Share price (for P÷E)]÷[Basic EPS]

### Example values

How the main result changes when **Net income** changes and everything else stays at the example values above:

Net incomeBasic EPS12,500,0001.1518,750,0001.7825,000,0002.431,250,0003.0337,500,0003.6550,000,0004.9

## Worked example

Inputs — Net income: $25,000,000; Preferred dividends: $1,000,000; Weighted average common shares: 10,000,000; Dilutive securities (options, convertibles): 400,000; Share price (for P/E): $48.

Results — **Basic EPS = $2.40**; Diluted EPS = $2.31; P/E ratio (basic) = 20.

## FAQ

**What is EPS?**
Profit per common share.

**Why subtract preferred dividends?**
They belong to preferred shareholders, not common shareholders.

**What is the difference between basic and diluted EPS?**
Diluted EPS includes shares that could be created by options and convertibles.

**What formula does the EPS Calculator – Earnings per Share use?**
Basic EPS = (net income − preferred dividends) ÷ weighted average common shares.


## Sources

- [Corporate Finance Institute – financial ratios](https://corporatefinanceinstitute.com/)