Earnings per share is equal to:
A) net income divided by the total number of shares outstanding.
B) net income divided by the par value of the common stock.
C) gross income multiplied by the par value of the common stock.
D) operating income divided by the par value of the common stock.
E) net income divided by total shareholders' equity.

Question

Quizplus · Accepted Answer

Earnings per share (EPS) is calculated by dividing net income available to common shareholders by the average number of shares outstanding during the period. This gives an indication of how much profit each shareholder would receive if all profits were distributed equally among them. EPS is therefore calculated as net income divided by the total number of shares outstanding.

Earnings Per Share Is Equal To