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Earnings Per Share (EPS)

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Earning per share (EPS), also called net income Break-Even
Analysis
per share, is a market prospect ratio that
Capitalization
Ratio
measures the amount of net income earned
Cash
per share of stock outstanding. In other words, Conversion
Cycle
this is the amount of money each share of
Cash
Earnings/Share
stock would receive if all of the profits were
Cash Flow
distributed to the outstanding shares at the end Coverage
Ratio
of the year.
Cash Ratio
CAGR
Earnings per share is also a calculation that
Contribution
shows how profitable a company is on a Margin
shareholder basis. So a larger company’s Correlation
Coefficient
profits per share can be compared to smaller
Cost of Goods
Sold
company’s profits per share. Obviously, this
Current Ratio
calculation is heavily influenced on how many
Days Payable
shares are outstanding. Thus, a larger Outstanding
company will have to split its earning amongst Days Sales in
Inventory
many more shares of stock compared to a
Days Sales
Outstanding
smaller company.
Debt Ratio

 Debt Service
Formula Coverage
Ratio
Debt to Asset
Earnings per share or basic earnings per share
Debt to Capital
is calculated by subtracting preferred dividends
Debt to Equity
from net income and dividing by the weighted Ratio

average common shares outstanding. The Debt to

Income
earnings per share formula looks like this. Defensive
Interval
Dividend
Payout

Dividend Yield

You’ll notice that the preferred dividends are DuPont

Analysis
removed from net income in the earnings per Earnings Per
Share
share calculation. This is because EPS only
EBIT
measures the income available to
EBITA
common stockholders. Preferred dividends are
EBITDA
set-aside for the preferred shareholders and
Enterprise
can’t belong to the common shareholders. Value
Equity
Multiplier
Most of the time earning per share is
Equity Ratio
calculated for year-end financial statements.
Expense Ratio
Since companies often issue new stock and
Fixed Asset
buy back treasury stock throughout the year, Turnover Ratio

the weighted average common shares are used Fixed Charge

Coverage
Ratio
in the calculation. The weighted average
Free Cash
common shares outstanding is can be Flow

simplified by adding the beginning and ending Goodwill to

Assets
outstanding shares and dividing by two. Gross Margin
Ratio
Gross Profit
Gross vs Net


 Interest
Analysis Coverage
Ratio
Internal Rate
Earning per share is the same as any of Return

profitability or market prospect ratio. Higher Inventory

Turnover Ratio
earnings per share is always better than a Loan to Value
lower ratio because this means the company is Long Term
Debt to Assets
more profitable and the company has more
Margin of
profits to distribute to its shareholders. Safety
Marginal
Revenue
Although many investors don’t pay much
Net Debt
attention to the EPS, a higher earnings per
Net Fixed
share ratio often makes the stock price of a Assets

company rise. Since so many things can Net Income

manipulate this ratio, investors tend to look at Net Interest

Margin
it but don’t let it influence their decisions Net Operating
Income
drastically.
Net Present
Value (NPV)
Net Profit
Margin
Example Net Working
Capital
Quality Co. has net income during the year of NOPAT
$50,000. Since it is a small company, there are Operating
Cash Flow
no preferred shares outstanding. Quality Co.
Operating
had 5,000 weighted average shares Income

outstanding during the year. Quality’s EPS is Operating

Leverage
calculated like this. Operating
Margin Ratio
Payables
Turnover Ratio
Payback
Period
As you can see, Quality’s EPS for the year is PEG Ratio
$10. This means that if Quality distributed 
every dollar of income to its shareholders, each Preferred
Dividend
Coverage
share would receive 10 dollars.
Present Value

Price Earnings
P/E Ratio
Price to Book
Dupont Analysis Price to Cash
Flow
Equity Multiplier
Price to Sales
Profit Margin
Contents [hide] Ratio

Quick Ratio –
Acid Test
1 Formula
R-squared
2 Analysis
Residual
3 Example Income
Retention
Ratio
Return on
Assets
Return on
Capital
Employed
Return on
Equity
Return on
Invested
Capital
Return on
Investment
Return on Net
Assets
Return on
Operating
Assets
Return on
Retained
Earnings
Return on
Sales
Rule of 72
Sales to
Admin
Expenses
 Ratio
Sharpe
 Sortino Ratio
Times Interest
Earned Ratio
Treynor Ratio

WACC
Working
Capital Ratio
Z-Score

Assets
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