# Use And Ratio The Graham Way Investing Engineer Eps Formula Pgold Kpi Fig Key Performance Indicators Profitability Ratios Define Earnings Per Share Calculator Quick Analysis

Finance Formulas / July 13, 2018 / Iliana Williamson

## Rate Of Return On Investment Formula

### Capm Formula

#### Roi Calculation Formula

##### Total Interest Formula
###### Market Price Formula

Earnings per share is the portion of a company's profit that is allocated to each outstanding share of its common stock. It is calculated by taking the difference between a company's net income and dividends paid for preferred stock and then dividing that figure by the average number of shares outstanding.

Consider the following example to illustrate the concept. Assume hypothetical company BigBox has operating income or earnings before interest and taxes (EBIT) of \$100 million in Year 1, with interest expense of \$10 million, and has 100 million shares outstanding. (For the sake of clarity, let’s ignore the effect of taxes for the moment.)

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