Learn how to calculate earnings per share (EPS) and why it is an important gauge in determining a stock’s value and the profitability of a company.

David Kindness is a Certified Public Accountant (CPA) and an expert in the fields of financial accounting, corporate and individual tax planning and preparation, and investing and retirement planning.

and it is used in the calculation of other popular valuation metrics like the price-to-earnings (P/E) ratio. To calculate earnings per share, divide a company’s annual or quarterly profit by the ...

(Earnings per share are typically reported quarterly ... In this way, the denominator in the equation consists of six months of real, past data, and six months of projected future data.

Take the retained earnings at the beginning of the ... also found in the annual report. Here is the formula for dividends per share: Total dividends ÷ shares outstanding = dividends per share.