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Questions and Answers containing earnings per share

How do companies calculate earnings per share (EPS)?

EPS is the amount of net profit for each share of common stock for one year. To calculate EPS, take the most recent annual net income and divide it by the number of common shares outstanding. A company that earns $1 million for the year and has two million shares outstanding has an EPS of $0.50.

Your EPS result may be slightly from that reported on the company’s financial report since they often use a weighted average number of shares outstanding for the reporting period.

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