In its simplest form, earnings per share for a company is calculated as
A) gross profit divided by the number of shares of stock held by that company's stockholders.
B) net income divided by the number of shares of stock held by that company's stockholders.
C) net income divided by the number of shares of stock traded for that company on the stock exchange at the end of the company's fiscal year.
D) operating income divided by the number of shares of stock held by that company's stockholders.
E) operating income divided by the number of shares of stock that the company is allowed to sell.

Question

Quizplus · Accepted Answer

Earnings per share (EPS) is calculated by dividing the net income of a company by the number of shares of stock held by the company's stockholders. This provides a measure of the company's profitability on a per-share basis.

In Its Simplest Form, Earnings Per Share for a Company