Earnings Per Share Excel Template

Description
Earnings per share denotes how much of net income each share has earned during the year.

The formula for earnings per share (EPS) is the following:

EPS = (Net Income - Preferred Dividend) / Weighted Average Number of Shares Outstanding

Every investor invests into a company’s stock mainly for two reasons:

1. They invest because they expect a high dividend from the company.
2. They may see potential for growth in the company. If it does grow, then share prices will rise and that will ensures a high return on their investment.

The investors use the EPS ratio for both of these reasons. The ratio helps them to understand whether a company has potential for growth and how much dividend a company may pay to its shareholders in the future.

If the EPS if high, then this shows that the company has been growing and has great financial health. If it is low, doubts may arise in the minds of the investors about the company.

This template will help you calculate EPS with ease. You will firstly have to find the weighted average number of common shares and then provide the two inputs of Net Income and Preferred Dividends.