Earnings per share is calculated by dividing net income by the number of outstanding shares of common stock at year-end.

Earnings Per Share

A profitability measurement that calculates the amount of net income earned per share of stock outstanding.

Net Income

The net income of a company following the subtraction of all expenditures and taxes from its total revenue.

Outstanding Shares

The total number of shares of stock that are owned by stockholders on any particular date.