Understanding EPS Changes: Calculating Percentage Growth

EPS is a company's net income earned for each share of stock.

Earnings per share, or EPS, is the amount of net income a company generates for each share of common stock during an accounting period. A company reports EPS on its income statement. Investors and analysts monitor a company's EPS closely each accounting period to track its performance and compare it to the earnings per share of other companies. You may calculate the percentage that a company's EPS changes between accounting periods to measure the amount by which the company's earnings are increasing or decreasing compared to a prior period.

Step 1

Determine a company's EPS for two accounting periods for which you want to measure a change. For example, use $1 for a company's EPS in one accounting period and $1.20 for the next.

Step 2

Subtract the company's EPS in the older period from its EPS in the more current period. In the example, subtract $1 from $1.20 to get 20 cents.

Step 3

Divide your result by the company's EPS in the older period. In the example, divide 20 cents by $1 to get 0.2.

Step 4

Multiply your result by 100 to calculate the percentage change in EPS between the two periods. A positive result represents an increase, while a negative result represents a decrease. In the example, multiply 0.2 by 100 to get a 20 percent increase in the company's EPS.