Learn how to calculate earnings per share (EPS) and why it is an important gauge in determining a stock’s value and the profitability of a company.

Say that the calculation of EPS for three companies at the end of the fiscal year was as follows: The formula in the table above calculates the basic EPS of each of these select companies.

Earnings per share is the quotient of a company's net income divided by the number of shares of stock it has outstanding. In other words, EPS is a company's profit expressed on a per-share basis.