1. What is Basic EPS?

Basic Earnings Per Share (EPS) is a financial metric that measures the amount of a company's profit that can be allocated to each outstanding share of its common stock. It's a key indicator of a company's profitability.

2. How Does the Calculator Work?

The calculator uses the Basic EPS formula:

Where:

• Net Profit — The company's net income after taxes (in USD)
• Basic Shares — Weighted average number of common shares outstanding during the period

Explanation: The formula divides the company's total earnings by the number of shares outstanding to show how much money the company makes for each share of its stock.

3. Importance of Basic EPS

Details: Basic EPS is crucial for investors to assess a company's profitability on a per-share basis, compare companies of different sizes, and evaluate investment opportunities. It's also used in calculating the price-to-earnings (P/E) ratio.

4. Using the Calculator

Tips: Enter net profit in USD and the weighted average number of basic shares outstanding. Both values must be positive numbers (shares must be ≥1).

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between Basic EPS and Diluted EPS?
A: Basic EPS uses the current number of shares, while Diluted EPS accounts for all potential shares that could be created through options, warrants, or convertible securities.

Q2: What is considered a good EPS?
A: There's no universal standard - it varies by industry. Generally, higher is better, and consistent growth over time is positive.

Q3: Can EPS be negative?
A: Yes, if the company reports a net loss instead of net profit, the EPS will be negative.

Q4: How often is EPS calculated?
A: Public companies report EPS quarterly and annually in their financial statements.

Q5: Why use weighted average shares?
A: Weighted average accounts for any changes in shares outstanding during the reporting period, providing a more accurate measure.