earnings per share formula

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

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