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.

In cell B7, input the formula "=B6/B5" to render the EPS ratio. Earnings per share (EPS) is an important profitability measure used in relating a stock's price to a company's actual earnings.

To calculate a company's P/E ratio, divide the price of one share of that company's stock by the earnings per share (often abbreviated EPS) of that company’s stock over a period of 12 months.

ratio. To calculate earnings per share, divide a company’s annual or quarterly profit by the number of shares of stock it has outstanding. Note: If a company has both preferred and common ...

Earnings yields are calculated as earnings per share divided by share price. Earnings yield are best used in comparisons; a higher earnings yield is generally more favorable. Earnings yields can ...

You can also calculate the dividend payout ratio by taking the dividend per share and dividing by the earnings per share, or EPS: Dividend per share / earnings per share = dividend payout ratio $4 ...

So, what is the price-earnings ratio, or P/E ... is overvalued or undervalued. The formula for calculating P/E is fairly simple: P/E = market value per share/earnings per share You'll have ...

Reviewed by JeFreda R. Brown The financial services sector is one of the most important drivers of the U.S. economy. The sector comes with different risks, which tend to change based on individual sub ...