How is earnings per common share calculated?
A)Operating profit divided by the average number of common stock shares outstanding.
B)Net profit divided by the average number of common and preferred stock shares outstanding.
C)Operating profit divided by the average number of repurchased common stock shares.
D)Net profit divided by the average number of common stock shares outstanding.

Question

Quizplus · Accepted Answer

Earnings per common share is calculated by dividing the net profit (or earnings) by the average number of outstanding common stock shares. It gives an indication of how much profit the company is making per share of common stock, and is an important metric for investors to evaluate the company's profitability and potential for future growth.

How Is Earnings Per Common Share Calculated