Free earnings per share calculator
See exactly what each share earns. Enter net income, preferred dividends, and the weighted average share count, and the calculator returns both basic and diluted earnings per share, the profit available to common shareholders, and the per-share impact of dilution — updated live, as you type.
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Estimates only, based on the figures you enter. Not investment advice.
Results are estimates. Consult a professional.
What is earnings per share (EPS)?
Earnings per share (EPS) is the portion of a company's profit assigned to each outstanding share of its common stock. It is one of the most-watched numbers in investing: it tells you, in a single figure, how much accounting profit the business generated for every share you own. A higher EPS means more profit is attributable to each share. This earnings per share calculator returns both basic and diluted EPS the moment you enter net income, preferred dividends, and the share count.
Two parts of the formula trip people up. First, you subtract preferred dividends, because preferred shareholders are paid before common holders, so that slice of profit is not theirs. Second, the denominator is the weighted average number of common shares over the period, not the share count on a single day — more on that below.
How to calculate earnings per share
Calculating EPS is a three-step process. You need just three figures, all of which appear in a company's income statement and the notes to its financial statements.
- Start with net income. This is the bottom-line profit for the period, after tax and all expenses — taken straight from the income statement.
- Subtract preferred dividends. Preferred shareholders get paid first, so remove their dividends to find the profit available to common shareholders.
- Divide by the weighted average common shares. The result is basic EPS. The calculator above does this live as you type, and adds diluted EPS alongside it.
A worked example using the earnings per share calculator
Acme Corp reported $10 million in net income this year. It paid $500,000 in preferred dividends and had a weighted average of 5 million common shares outstanding. Outstanding stock options and convertible notes could add 500,000 more shares. Here is how the calculator works through it.
Step 1 — Find the earnings available to common
Subtract the preferred dividends from net income: $10,000,000 − $500,000 = $9,500,000. This is the profit that belongs to common shareholders, and it is the numerator for both basic and diluted EPS.
Step 2 — Divide by common shares for basic EPS
Divide $9,500,000 by the 5,000,000 weighted average common shares: $9,500,000 ÷ 5,000,000 = $1.90. Acme's basic EPS is $1.90.
Step 3 — Add dilutive shares for diluted EPS
Add the 500,000 potential dilutive shares to the denominator: $9,500,000 ÷ 5,500,000 = $1.73. Acme's diluted EPS is $1.73 — lower than basic, because the same profit is now spread across more shares.
| Step | Figure | Value |
|---|---|---|
| Net income | Bottom-line profit | $10,000,000 |
| Less preferred dividends | Paid before common | −$500,000 |
| Earnings to common | EPS numerator | $9,500,000 |
| Basic EPS | ÷ 5,000,000 shares | $1.90 |
| Diluted EPS | ÷ 5,500,000 shares | $1.73 |
Basic vs diluted EPS for Acme Corp — diluted is the more conservative figure.
Basic EPS vs diluted EPS
Companies report two EPS figures, and the difference matters. Basic EPS uses only the shares actually outstanding. Diluted EPS assumes every dilutive security — stock options, warrants, and convertible bonds or preferred stock — is converted into common shares, showing the worst-case spread of earnings across the largest possible share count.
Because diluted EPS uses a larger denominator, it is always equal to or lower than basic EPS — never higher. Analysts tend to focus on diluted EPS precisely because it is the more conservative, more complete picture of what each share earns. A wide gap between the two is a signal that a company has issued a lot of options or convertibles that could dilute existing shareholders.
| Basic EPS | Diluted EPS | |
|---|---|---|
| Denominator | Weighted average common shares | Common shares + all dilutive securities |
| Assumes conversion? | No | Yes — options, warrants, convertibles |
| Relative size | Higher | Equal or lower |
| Best for | A simple profitability read | A conservative, complete view analysts prefer |
How EPS feeds the price-to-earnings (P/E) ratio
EPS is almost never looked at in isolation — it is the engine behind the price-to-earnings (P/E) ratio, the most common gauge of whether a stock is cheap or expensive. The P/E ratio divides the share price by EPS, telling you how much investors are paying for each dollar of the company's earnings.
For example, a stock trading at $38 with an EPS of $1.90 has a P/E of 20 — investors are paying $20 for each $1 of annual earnings. Because EPS sits in the denominator, two companies with the same share price but different EPS will have very different P/E ratios. That is why analysts watch EPS growth so closely: rising earnings per share, with the price flat, pulls the P/E down and makes the stock look cheaper.
What is a good EPS?
There is no universal 'good' EPS number — a $0.50 EPS at one company can be far more impressive than a $5 EPS at another, because EPS depends on the share count, the share price, and the industry. A company that splits its stock, doubling its share count, halves its EPS overnight without becoming any less profitable. So a single EPS figure in isolation tells you very little.
- Positive and growing — the most reliable signal. Consistently rising EPS year over year usually points to a strengthening business.
- Compared to peers — EPS is most useful when measured against other companies in the same industry, not across sectors.
- Relative to price — pair EPS with the share price (the P/E ratio) to judge whether the earnings are cheap or expensive.
- Basic vs diluted gap — a small gap is reassuring; a wide one warns of heavy potential dilution.
A negative EPS means the company lost money over the period — common for early-stage and high-growth firms still investing ahead of profit. It is not automatically a red flag, but it does mean the P/E ratio is meaningless until earnings turn positive.
The limitations of EPS
EPS is powerful but not complete. It can be massaged: a share buyback shrinks the denominator and lifts EPS even when total profit is unchanged, and one-off gains — such as selling a building or a tax windfall — can inflate net income for a single period. EPS also ignores how much capital the company needed to generate those earnings, which is why investors pair it with returns-based measures and cash-flow analysis rather than relying on it alone.
EPS growth — why the trend matters more than the number
Because a single EPS figure means little on its own, investors watch how it changes over time. EPS growth measures how fast earnings per share are rising from one period to the next, and it is one of the cleanest signals that a business is becoming more profitable on a per-share basis rather than simply getting bigger by issuing more stock.
For example, if Acme's diluted EPS rose from $1.73 last year to $1.95 this year, EPS growth is ($1.95 − $1.73) ÷ $1.73 = 12.7%. Steady double-digit EPS growth, sustained over several years, is what long-term investors prize — and it is far more meaningful than whether the headline number happens to be $0.50 or $5.00. Watch for growth driven by genuinely higher profit, not by share buybacks alone, which can lift EPS by shrinking the denominator even when earnings are flat.
Where to find the numbers for this calculator
Every figure this calculator needs is public for any listed company. You will find net income, preferred dividends, and the weighted average share counts in the company's quarterly (10-Q) and annual (10-K) filings with the SEC, or summarised on any major financial website's statistics page.
- Net income — the bottom line of the income statement.
- Preferred dividends — in the income statement or the notes; often zero for companies with no preferred stock.
- Weighted average shares (basic and diluted) — reported directly beneath net income on the income statement.
Formula and sources
This calculator uses the standard EPS definitions set out in accounting and valuation references: basic EPS as net income less preferred dividends divided by weighted average common shares, and diluted EPS dividing the same numerator by the share count expanded for all dilutive securities. The treatment of diluted shares follows the rules in IAS 33 / ASC 260, the international and US accounting standards for earnings per share.
Corporate Finance Institute — Earnings Per Share (EPS) Formula.Frequently asked questions about the free earnings per share calculator
About this earnings per share calculator
This earnings per share calculator runs entirely in your browser. Every figure you enter stays on your device — nothing is sent to a server, logged, or shared. It subtracts preferred dividends from net income, divides by your weighted average common shares for basic EPS, and adds dilutive shares to the denominator for diluted EPS, updating instantly as you type.
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