How to Calculate an EPS Income Statement
- 1). Calculate the company's total revenues for the year. Add up all revenue sources on the income statement.
- 2). Calculate the company's total expenses for the year. Add up all expenses paid during the year. This information is also on the income statement.
- 3). Subtract total expenses from total expenses to calculate the company's net income for the year.
- 4). Find the total number of outstanding shares for the company during the year on the income statement.
- 5). Divide the net income by the outstanding number of shares to calculate the earnings per share.
Example: A company made $500,000 in revenue with $300,000 in total costs over the past year. It has 3,000 shares of stock outstanding. To get its earning per share, use the following equation:
Net income = 500,000 - 300,000 = $200,000
EPS = net income/shares outstanding
= $200,000/3,000
= $66.67 earnings per share
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