Formula of EPS?

The formula for calculating Earnings Per Share (EPS) is as follows:

EPS = (Net Income – Preferred Dividends) / End of period Shares Outstanding

Alternatively, it can also be calculated as:

EPS = (Net Income – Preferred Dividends) / Weighted Average Shares Outstanding

The first formula uses total outstanding shares to calculate EPS, while the second formula takes into account the weighted average shares outstanding over a specific period. This adjustment is important because the number of outstanding shares can change over time due to factors like stock buybacks or the issuance of new shares.

In summary, EPS measures a company's profitability by dividing its net income by the number of outstanding shares, providing insight into how much profit a company generates for each share of stock.