What is Earning per share (EPS)? How to Calculate EPS?

Earnings per share (EPS) is calculated as a company’s profit (Profit after Tax-Preferred dividend) divided by the outstanding shares. The resulting number serves as an indicator of a company’s profitability. It is common for a company to report EPS that is adjusted for extraordinary items and potential share dilution. The higher a company’s EPS, the more profitable it is considered to be.

Formula of EPS

EPS = (PAT-Preferred Dividend)/Weighted Average No. of Shares Outstanding

Example how to calculate EPS