Earnings Per Share (EPS) Calculator
Earnings Per Share (EPS) measures the portion of a company’s net profit allocated to each individual outstanding share of common stock. It is the fundamental building block for stock valuation metrics like the P/E Ratio.
Sensitivity Analysis
Evaluate how variations in key operational drivers impact Earnings Per Share (EPS).
| Sensitivity Case | Assumption Shift | Driver Value | Earnings Per Share (EPS) | Impact vs Base |
|---|
Formula & Methodology
EPS = (Net Income - Preferred Dividends) / Weighted Average Shares OutstandingNet IncomeBottom line post-tax net profit.
Preferred DividendsContractual dividend obligations to preferred shareholders.
Shares OutstandingTotal diluted common shares outstanding during the period.
Practical Worked Example
Apex Tech earned $24,000,000 in net profit with no preferred dividends and 6,000,000 diluted shares outstanding.
Interpretation & Industry Benchmarks
EPS growth over time is the primary engine of long-term stock price appreciation.
Net loss per share.
Positive bottom-line earnings power.
Industry Nuance: Always compare diluted EPS rather than basic EPS to factor in potential share dilution from stock options and convertible debt.
Analytical Limitations
- EPS can be artificially boosted via aggressive share buybacks without actual operating profit growth.
Frequently Asked Questions
What is the difference between Basic EPS and Diluted EPS?
Basic EPS divides earnings by current shares outstanding. Diluted EPS assumes all convertible bonds, options, and warrants are exercised, providing the most conservative per-share metric.