Earnings per share
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Earnings per share (EPS) is the amount of earnings per each outstanding share of a company's stock.

In the United States, the Financial Accounting Standards Board (FASB) requires companies' income statements to report EPS for each of the major categories of the income statement: continuing operations, discontinued operations, extraordinary items, and net income.

## Calculating EPS

The EPS formula does not include preferred dividends for categories outside of continued operations and net income. Earnings per share for continuing operations and net income are more complicated in that any preferred dividends are removed from net income before calculating EPS. This is because preferred stock rights have precedence over common stock. If preferred dividends total $100,000, then that is money not available to distribute to each share of common stock. Earnings Per Share (Basic Formula) $\mbox{Earnings Per Share}=\frac{\mbox{Profit}}{\mbox{Weighted Average Common Shares}}$ Earnings Per Share (Net Income Formula) $\mbox{Earnings Per Share}=\frac{\mbox{Net Income}}{\mbox{Weighted Average Common Shares}}$ Earnings Per Share (Continuing Operations Formula) $\mbox{Earnings Per Share}=\frac{\mbox{Income from Continuing Operations}}{\mbox{Weighted Average Common Shares}}$ Only preferred dividends actually declared in the current year are subtracted. The exception is when preferred shares are cumulative, in which case annual dividends are deducted regardless of whether they have been declared or not. Dividends in arrears are not relevant when calculating EPS. Wikimedia Foundation. 2010. ### Look at other dictionaries: • earnings per share — (EPS) The net profit attributable to ordinary shareholders divided by weighted average number of ordinary shares in issue. A fully diluted EPS calculation means that the figure is adjusted to take account of shares that will be issued under… … Law dictionary • earnings per share — noun plural BUSINESS a number that expresses how much a company pays its stockholders for every SHARE in the company that they own … Usage of the words and phrases in modern English • earnings per share — ( EPS) A company s profit divided by its number of common outstanding shares. If a company earning$2 million in one year had 2 million common shares of stock outstanding, its EPS would be \$1 per share. In calculating EPS, the company often uses… …   Financial and business terms

• earnings per share — eps The profit in pence attributable to each ordinary share in a company, based on the consolidated profit for the period, after deducting minority interests and preference share dividends. This profit figure is divided by the weighted average… …   Accounting dictionary

• earnings per share — eps The profit in pence attributable to each ordinary share in a company, based on the consolidated profit for the period, after deducting minority interests and preference share dividends. This profit figure is divided by the weighted average… …   Big dictionary of business and management

• earnings per share — EPS *Net income accruing to a corporation’s stockholders, expressed in terms of individual shares of ownership. The earnings per share (EPS) is calculated by dividing net income by *common stock. In practice, this basic calculation can require… …   Auditor's dictionary

• Earnings per share — Der Gewinn je Aktie (englisch Earnings per Share, EPS) ist eine Kennzahl zur Beurteilung der Ertragskraft einer Aktiengesellschaft. Für die Ermittlung dieser Kennzahl wird der Konzernjahresüberschuss des Unternehmens (im untersuchten Zeitraum)… …   Deutsch Wikipedia

• earnings per share — /ˌɜ:nɪŋz pə ʃeə/ plural noun the money earned in dividends per share, shown as a percentage of the market price of one share. Abbreviation EPS …   Dictionary of banking and finance

• earnings per share — noun a company s net profit divided by the total number of shares in the company, usually expressed as cents per share. Also, EPS …   Australian English dictionary

• earnings per share — the net income of a corporation divided by the total number of shares of its common stock outstanding at a given time. Abbr.: EPS * * * …   Universalium