Earnings Per Share Formula Income Statement

The earnings per share formula looks like this.
Earnings per share formula income statement. Earnings per share eps 1 90 earnings per share formula example 3. In this example the net income for bob s miniatures is 122 200. Earnings per share eps is the portion of a company s profit allocated to each outstanding share of common stock. Earnings per share or basic earnings per share is calculated by subtracting preferred dividends from net income and dividing by the weighted average common shares outstanding.
Assume abc corporation reported a net income of 10 million for the fiscal fy18. For example if a company made 1 000 during a year and has a total of 1 000 shares of stock then everyone who owns that company s stock. Preferred dividends are the second item used to calculate earnings per share. Earnings per share eps 10 0 50 million 5 million.
Companies calculate the basic earnings per share by dividing net earnings by the total number of common shares outstanding. As you can see in the excel screenshot below if abc ltd has a net income of 1 million dividends of 0 25 million and shares outstanding of 11 million the earnings per share formula is 1 0 25 11 0 07. This calculation tells investors how much money each share of stock they own earned during the period. Eps for a company with preferred and common stock net income preferred.
Basic earnings per share.