what is earnings per share eps 
earnings per share eps is a measure of a company s profitability that indicates how much profit each outstanding share of common stock has earned it s calculated by dividing the company s net income by the total number of outstanding shares the higher a company s eps the more profitable it is considered to be investopedia alex dos diazearnings per share equationearnings per share value is calculated as net income also known as profits or earnings divided by available shares a more refined calculation adjusts the numerator and denominator for shares that could be created through options convertible debt or warrants the numerator of the equation is also more relevant if it is adjusted for continuing operations to calculate a company s eps the balance sheet and income statement are used to find the period end number of common shares dividends paid on preferred stock if any and the net income or earnings it is more accurate to use a weighted average number of common shares over the reporting term because the number of shares can change over time understanding how to find eps is crucial for evaluating a company s profitability any stock dividends or splits that occur must be reflected in the calculation of the weighted average number of shares outstanding some data sources simplify the calculation by using the number of shares outstanding at the end of a period example of epssay that the calculation of eps for three companies at the end of the fiscal year was as follows 