Definition
The portion of a company's net income allocated to each outstanding share of common stock. A key metric used by investors to assess profitability.
Formula
EPS = (Net Income − Preferred Dividends) ÷ Weighted Average Common Shares
Example
Net income $500,000 − Preferred dividends $50,000 = $450,000 ÷ 150,000 shares = $3.00 EPS.