Earnings per Share Calculator

Earnings per Share Calculator

Net Income:
Common Shares:

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  • How Is Earnings Per Share Calculated?

    What is Profit Per Share?

    Per share profit is the most important issue for a stock investor. He may want to calculate what the profit he will get from the investment he feels to invest or what it might be. Ultimately, it is the card that someone who owns a business shares in the stock market acquires due to ownership of shares.

    How Is Profit Per Share Calculated?

    Profit per share is calculated by dividing the total profit by the total number of shares. It is a rate that shows the potential of public companies to distribute dividends.
    One of the important points in the calculation of earnings per share is dividend.

    What is Dividend?

    Dividends are called the shares to be distributed to the investors of the enterprises. This distribution process is also called dividend distribution. This amount is taken at the general assembly with the proposal of the board of directors according to the net profit of the company. While calculating the profit per share, the amount of dividend distributed is deducted from the total profit and calculated as per share.

    Profit Calculation Sample Solution

    If an explanation is required with an example; Let's assume that a business made a net profit of $ 4,000.00 at the end of the year and decided to distribute $ 1,000,000 by the board decision.
    The number of shares is determined by the paid capital of the enterprise. For example, for this example, we have $ 1,500,000 paid capital. In this case, we can take the number of shares as 1.500.000.
    According to the earnings per share calculation formula;
    (4.000.000 - 1.000.000) / 1.500.000 = $ 2.
    • The important point here is that if the paid capital of the enterprise was $ 1,000,000 in the first 6 months of the year, $ 1,500,000 in the second six months, we would find the average with the weighted average and calculate it according to 1,250,000 shares.
    • Another important point is that if the enterprise had a paid capital of $ 1,000,000, but if the part of the stock market was 40% of the company, we would calculate 500,000 shares.