Earnings per share Calculator
Earnings per share calculator help you to calculate the EPS ratio. Enter the amounts of net income, dividends on preference shares, and the number of shares and get instant results.
Earnings per share calculator is an advanced tool developed for calculating the proportion of a company’s profit, which is allocated to each issued share held by the shareholders. The basic aim of developing this tool is to make it easier for people to calculate earnings per share ratio of multiple companies before deciding on purchasing shares.
Before the inception of this tool, it was a strenuous chore to calculate EPS as it involves the usage of a formula. It’s not easy for everyone to memorize the formula; therefore, the Earnings per share calculator is the easy way out from this nuisance. By just entering the relevant values in the given boxes, you will be able to calculate EPS raito in a couple of seconds without paying a penny.
Earnings per share is a financial ratio used for measuring the profitability of a company. EPS is a widely used metric by investors for estimating the value of any company. Basically, the earnings per share ratio let the investors know the amount of money a company is making for each share in its stock. A higher EPS builds the confidence of investors in a company’s ability to generate profit, and they will be willing to pay more to get the shares.
Basic Earnings Per Share
Basic earnings per share is a rough measurement of a company’s profit allocated to each of its outstanding shares. It defines a company’s financial health to estimate its ability to offer a return against each issued share. Businesses with simple capital structures need to only calculate basic EPS for revealing their profitability.
Diluted Earnings Per Share
A company calculates diluted earnings per share if all of its convertible securities are converted. The dilutive securities are the ones that can be converted to common stock. The diluted earnings per share are always less than basic earnings per share as all securities are converted to common stock for its calculation.
The earnings per share can be calculated with the following formula.
Earnings per share formula = (Net Income - Preferred Stock Dividend) / Average Number of Outstanding Common Shares
The three basic things involved in this formula are net income, preferred stock dividend, and the average number of outstanding common shares. Let’s discuss each of them individually.
The net income refers to a company’s profit after the deduction of all expenses, loan interest, debenture interest, and taxes.
Preferred Stock Dividend
This is the dividend amount paid to the preference shareholders.
Average Outstanding Common Shares
The total number of common shares issued by a company from its common stock is the average outstanding common shares.
Example of Calculating Earnings per share:
Let’s discuss an example to fully understand the usage of the basic EPS formula to calculate EPS ratio.
Net income = $800,000
Preferred Stock Dividend = $800,000
Average Outstanding Common Shares = 20000
Then put values in the EPS formula mentioned above,
EPS = $34
This earnings per share calculator is an easy way out to save yourself from the mess of calculating earnings per share manually. This earnings per share calculator provides you with accurate results without letting you go through any intricate procedure. You don’t have to get registered for accessing the Earnings per share calculator on searchenginereports.net.
For using this tool, you just have to follow the simple steps mentioned below.
- Enter the relevant amounts in the boxes provided accurately.
- After entering the values, click on the “Calculate EPS” button.
- As you will click this button, the tool will commence the calculation process and display the results in a matter of seconds.