Earnings Per Share Revenue – (Costs + Depreciation) / Shares Issued*(Shares Outstanding/Shares Issued)
The Earnings Per Share calculation assumes that revenue grows at the same percentage rate as the number of shares outstanding. This assumption may not always hold true, if the company experiences significant price declines or increases in costs during the time period being analyzed.
Example: 100,000 shares issued, 200 million revenue, 10 million costs and depreciation, $0.50 EPS
This would equal 50 cents earnings per share.
EPS Formula
Earnings Per Share (EPS) Net Income / Average Shares Outstanding
Average shares outstanding Total number of shares multiplied by average price per share
Net income Revenue – Expenses
Revenue Gross Sales + Other Revenues
Gross sales Revenue less Cost of Goods Sold
Cost of goods sold Selling, General & Administrative expenses + Depreciation
Other revenues Interest income + Royalties
Expenses Salaries & Wages + Taxes + Depreciation
how to calculate earnings per share
Earnings Per Share (EPS) Net Income / Average Shares Outstanding
Average shares outstanding Total Number of Shares Outstanding x Price Per Share
Net income Revenue – Expenses
Revenue Gross Sales + Other Revenues
Gross sales Product Sold + Services Sold
Other revenues Interest Earned + Royalties Received