Accounting › Section M · Corporation accounting › Topic M.5
Earnings per share
Investors who own a few shares want to know what the company earned for each one. Earnings per share answers that question, but only if the earnings belong to common stockholders and the share count reflects how long each share was outstanding.
In this topic
- What EPS measures
- The basic EPS formula
- Which preferred dividends to subtract
- Why the shares are weighted
- Worked example: weighted average shares
- Stock dividends and splits are retroactive
- Worked example: calculating basic EPS
- Buybacks can lift EPS
- EPS beside other measures
- Common mistakes to avoid
- Key takeaways
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