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+ Burning Spurshare or EPS? How do I calculate EPS? Is EPS the same as dividend per share? These are the questions we will look at in this final storyteller video. Let's take an example of EPS from a very well known company. Do you know of any company that had 216 billion in revenue in 2016 and 46 billion in income? You guessed it right, Apple. How do we calculate Apple's EPS? The formula for the earnings per share is to take the net income and divide it by the number of shares. EPS is there for the proportional part of total profits that is attributable to you if you own one unit of a company's stock. Apple's net income was 45.7 billion, but how many shares did Apple have on average in 2016? There are two numbers at the bottom of the page, the basic number of shares and the diluted number of shares. What is the difference between these two? The word diluted gives you the way. If you have ever taken a science class, you probably have worked on diluting the active ingredient in a fluid to make its effect weaker. That's pretty much the same as what is happening when you look at diluted EPS. The effect of dilution has been taken into account. The basic number of shares is the number that currently exists. The number below it is the number that could exist if all convertible securities were exercised at the earliest point in time. Things like stock options, convertible debt and warrants. So let's calculate basic EPS first. Take the 45.7 billion of net income and divide by 5.47 billion shares to get to $8.35 per share. Next we calculate diluted EPS. We once again take the 45.7 billion of net income in the numerator, but this time we divide by 5.5 billion of what is often called common stock and common stock equivalence. We get to $8.31 of diluted EPS. Is EPS the same as dividend per share? No it is not. EPS is the proportional part of total profits that is attributable to you if you own one unit of a company's stock. Dividend per share is what is actually paid out by the company. As you see in this chart, Apple has a dividend payout of 26% of its profit. The rest of the cash is kept inside the company for future use, but that's the topic of another video. On the Finance Storyteller YouTube channel, you can find lots of well-researched videos explaining business, finance and accounting topics. Please subscribe to the Finance Storyteller channel and take the time to like the video and comment below. On average I post one new video per week. If you subscribe to the channel, you will be the first to see it.