The basic EPS formula does not consider the effect of any dilutive securities. Earnings per share represents that portion of company income that is available to the holders of its common stock.The measure is closely monitored by investors, who use it to estimate the performance of a business.. This is calculated by dividing Retained Earnings by the total number of Shares Outstanding. Calculating Earnings per share is simply by subtracting the dividends on preferred stock from the net income and dividing the result by average outstanding shares. EPS calculation in a simple capital structure is as follows. Earnings Per Share (EPS) which is also called ‘Net Income Per Share is an accounting ratio computed usually at the end of the financial year on the basis of profit earned. Earnings Per Share Formula. This ratio is market prospect and computes profitability levels of an entity. In the United States, the Financial Accounting Standards Board (FASB) requires EPS information for the four major categories of the income statement: continuing operations, discontinued operations, extraordinary items, and net income The 5 highest Retained Earnings PS Stocks in the Market. 4 billion. Amid at a similar time, the organization had an aggregate of 10 billion shares outstanding. The formula for earnings per share is a company's net income minus any dividends on preferred shares, divided by the number of common shares outstanding. Finding the earning per share will give you an insight in calculating the price-to-earnings ratio. Retained earnings per share refers to the portion of net income which is retained by the company rather than distributed to its owners as dividends. Earnings per share (EPS) is the monetary value of earnings per outstanding share of common stock for a company.. Earnings Per Share Example / EPS Example: Earnings Per Share Example-1: Assuming it’s a final quarter, Company ABC revealed net income of Rs. Here the word earnings has the same meaning as profit. Here we use the actual earnings and actual number of issued common shares issued .