Calculate basic EPS, diluted EPS, P/E ratio, earnings yield, payout ratio, and EPS growth
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Faiq Ur Rahman is a web designer, digital product developer, and founder of Toolraxy, a growing platform of web-based calculators and utility tools. He specializes in building structured, user-friendly tools focused on health, finance, productivity, and everyday problem-solving.
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This earnings per share calculator converts a company’s net income, preferred dividends, and share count into basic EPS, diluted EPS, and the valuation multiples built on top of them. You get P/E ratio, earnings yield, payout ratio, retention ratio, EPS growth, and PEG ratio in a single view. An optional five-year projection shows where EPS lands if the growth rate holds.
This calculator starts with net income, subtracts preferred dividends, and divides by the weighted average share count. If you enter dilutive shares from options, RSUs, or convertibles, it also computes diluted EPS. That’s the more conservative number, and the one analysts usually quote when comparing companies.
Enter share price and DPS, and the tool layers on valuation and payout metrics. Enter a prior-year EPS or an expected growth rate, and you get year-over-year growth, PEG ratio, and a five-year projection. Useful for screening, valuation work, or just understanding what a headline EPS number actually represents.
Choose your currency from the dropdown.
Enter net income. If it’s pre-tax, add a tax rate. If it’s already after tax, leave tax at 0.
Enter preferred dividends, or leave at 0 if the company has none.
Enter weighted average shares outstanding for basic EPS.
Add dilutive shares (options, RSUs, convertibles) for diluted EPS.
Enter the current share price.
Add dividends per share if the company pays a dividend.
Set prior-year EPS and expected growth rate to unlock growth, PEG, and the projection table.
Basic EPS is net income available to common shareholders divided by the weighted average share count.
Formula: Basic EPS = (Net Income − Preferred Dividends) ÷ Weighted Average Shares
Formula: Diluted EPS = (Net Income − Preferred Dividends) ÷ (Basic Shares + Dilutive Shares)
Formula: P/E Ratio = Share Price ÷ Basic EPS
Formula: Earnings Yield = (Basic EPS ÷ Share Price) × 100
Formula: Payout Ratio = (Dividends per Share ÷ Basic EPS) × 100
The calculator applies the tax rate first if you enter one. So $12,000,000 of pre-tax income with a 25% tax rate becomes $9,000,000 after tax before preferred dividends are subtracted.
A negative basic EPS still displays, and the P/E table flags the negative territory as “Negative (loss).” The tool doesn’t crash on losses or zero values. If shares are zero, EPS shows as zero. If price is zero, P/E and earnings yield show as blanks. These edge cases are handled so you can see exactly which input is missing.
The five-year projection compounds your expected EPS growth rate into future basic and diluted EPS. It doesn’t model dilution changes, share buybacks, or margin shifts.
Suppose a mid-cap industrial company reports $8,400,000 in net income after tax, $300,000 in preferred dividends, and 5,200,000 weighted average shares outstanding. It has 210,000 dilutive shares from employee stock options. Share price is $72, DPS is $0.84, prior-year EPS was $1.38, and expected growth is 9%.
Income to common shareholders: $8,400,000 − $300,000 = $8,100,000.
Basic EPS: $8,100,000 ÷ 5,200,000 = $1.5577 per share.
Diluted shares: 5,200,000 + 210,000 = 5,410,000.
Diluted EPS: $8,100,000 ÷ 5,410,000 = $1.4972 per share.
P/E ratio: $72 ÷ $1.5577 = 46.22×.
Earnings yield: ($1.5577 ÷ $72) × 100 = 2.16%.
Payout ratio: ($0.84 ÷ $1.5577) × 100 = 53.9%.
EPS growth YoY: ($1.5577 − $1.38) ÷ $1.38 × 100 = 12.88%.
PEG ratio: 46.22 ÷ 9 = 5.14.
The P/E table places 46.22× in the “Very high” band. That’s a growth premium, and the PEG of 5.14 says the multiple is high even after accounting for growth. A screen result worth digging into, but not a screaming buy. Year 5 EPS at 9% growth lands at $2.40.
Earnings per share is the profit a company earns for each outstanding share of common stock. It equals net income minus preferred dividends, divided by the weighted average number of common shares. It’s the base number behind P/E ratios and most valuation screens.
Subtract preferred dividends from net income, then divide by weighted average shares outstanding. If a company earns $10 million, pays $500,000 in preferred dividends, and has 5 million shares, basic EPS is ($10M − $500K) ÷ 5M = $1.90.
Basic EPS uses only shares that exist today. Diluted EPS adds potential shares from options, RSUs, and convertibles. Diluted EPS is the more conservative number and is usually lower than basic EPS. Analysts quote diluted EPS more often for comparisons.
Historically, the S&P 500 has averaged a P/E between 15 and 20. A P/E below 12 often indicates value territory. Above 25 usually means growth expectations. Above 40 signals a high-growth premium that requires strong earnings expansion to justify.
Take the difference between current and prior EPS, divide by the prior EPS, and multiply by 100. Growth from $1.20 to $1.50 is ($1.50 − $1.20) ÷ $1.20 × 100 = 25%. The calculator computes this when you enter prior-year EPS.
The PEG ratio divides P/E by the expected earnings growth rate. A P/E of 20 with 15% growth gives a PEG of 1.33. A PEG near 1.0 is often considered fair value. Below 1.0 suggests undervaluation relative to growth, and above 2.0 is expensive.
Divide dividends per share by earnings per share, then multiply by 100. A $1.50 DPS on $3.00 EPS gives a 50% payout ratio. Ratios between 30% and 60% are generally healthy, though utilities and REITs often run higher.
Earnings yield is the inverse of the P/E ratio, expressed as a percentage. It equals basic EPS divided by share price. A stock with $4 EPS at $50 trades at an 8% earnings yield. It’s useful for comparing stocks against bonds and other income investments.
Yes. When a company reports a net loss, EPS is negative. A negative EPS makes P/E meaningless, so the calculator flags it as “Negative (loss)” in the interpretation table. Analysts usually switch to price-to-sales or price-to-book for unprofitable companies.
Diluted share count is basic shares plus all potential shares from stock options, restricted stock units, convertible bonds, and warrants. The calculator adds whatever dilutive share count you enter to the basic shares to compute diluted EPS.
Buybacks reduce the share count, which raises EPS even if net income stays flat. A company with $10 million in net income and 5 million shares has $2.00 EPS. Buying back 500,000 shares lowers the count to 4.5 million and lifts EPS to $2.22 with no operational change.
Retention ratio is the percentage of earnings kept in the business rather than paid out as dividends. It equals 100% minus the payout ratio. A 40% payout ratio means a 60% retention ratio, which is the profit available for reinvestment, debt reduction, or buybacks.
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