# Frequent question: How do you calculate earnings per common share?

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## What is the formula for earnings per share?

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.

## What is earnings per common share?

Share. Earnings per common share (EPS) is a measure of profitability that shows how much of a company’s profit is assigned to each of its common shares. EPS is calculated as follows: Earnings after tax (EAT) – Preferred dividends. Number of commons shares outstanding.

## What is earnings per share and how is it calculated?

Earnings per share (EPS) is a figure describing a public company’s profit per outstanding share of stock, calculated on a quarterly or annual basis. EPS is arrived at by taking a company’s quarterly or annual net income and dividing by the number of its shares of stock outstanding.

## How do I calculate earnings per share in Excel?

After collecting the necessary data, input the net income, preferred dividends and number of common shares outstanding into three adjacent cells, say B3 through B5. In cell B6, input the formula “=B3-B4” to subtract preferred dividends from net income. In cell B7, input the formula “=B6/B5” to render the EPS ratio.

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## How do you calculate EPS per share?

Determining Market Value Using P/E

Multiply the stock’s P/E ratio by its EPS to calculate its actual market value. In the above example, multiply 15 by \$2.50 to get a market price of \$37.50.

## How do you calculate earnings?

Net earnings: Calculate the net earnings (aka net income or net profit) by subtracting total expenses from total revenue to see exactly how much a company profits (a new profit) or loses (a net loss). A company’s net earnings over time is a great indicator of how well or poorly its management team runs the company.

## How do you calculate EPS without preferred dividends?

To calculate the EPS for common shares, subtract the preferred dividends from the corporation’s net income and then divide the result by the number of common stock outstanding. You cannot calculate the EPS unless you know the number of preferred shares and the annual dividend payable to each preferred share.

## How do you calculate EPS from annual report?

Earnings per share are calculated by dividing the result for the year attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the year.