How to Calculate 'Earnings Per Share - EPS'
To calculate the EPS of a company, the balance sheet and income statement should be used to find the total number of shares outstanding, dividends on preferred stock (if any), and the net income or profit value. When calculating, it is more accurate to use a weighted average number of shares outstanding over the reporting term, because the number of shares outstanding can change over time. Any stock dividends or splits that occur must be reflected in the calculation of the weighted average number of shares outstanding. However, data sources sometimes simplify the calculation by using the number of shares outstanding at the end of a period.