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
| Field | What to enter |
|---|---|
| Net income | Amount in your currency |
| Preferred dividends | Amount in your currency |
| Weighted average common shares | A number |
| Dilutive securities (options, convertibles) | A number |
| Share 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 income | Basic EPS |
|---|---|
| 12,500,000 | 1.15 |
| 18,750,000 | 1.78 |
| 25,000,000 | 2.4 |
| 31,250,000 | 3.03 |
| 37,500,000 | 3.65 |
| 50,000,000 | 4.9 |
Formula
Basic EPS = (net income − preferred dividends) ÷ weighted average common sharesDiluted EPS = (net income − preferred dividends) ÷ (shares + dilutive securities)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.
Frequently asked questions
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.