Earnings per share (EPS) measures the profits of a company for each share of stock issued. Generally, the higher the EPS, the better a company is performing. Over time, investors want to see the EPS increasing relative to the stock price. To measure the growth rate of the EPS for a company, you need to know the EPS at the start and end of the time period over which you want to measure the growth.
Subtract the beginning EPS from the ending EPS to calculate the change in EPS. For example, if you are measuring the EPS growth rate from year one to year two, subtract the EPS from year one from the EPS for year two. If the EPS grew from $1.20 to $1.50, subtract $1.20 from $1.50 to get 30 cents.
Divide the change in EPS by the beginning EPS to calculate the growth rate as a decimal. In this example, divide 30 cents by $1.20 to get 0.25.
Multiply the EPS growth rate as a decimal by 100 to convert the growth rate to a percentage. In this example, multiply 0.25 by 100 to find the EPS growth rate: 25 percent.
- Thinkstock Images/Comstock/Getty Images
- How Do I Calculate an Interest Rate?
- What Is Going to Happen if I Owe Back Property Taxes?
- How to Calculate the Effective Interest Rate for Discounted Bonds
- How to Calculate Interest Rate Payments
- How to Calculate EPS Growth Rate
- How to Calculate Interest Rate Using Present & Future Value
- SEC Yield Vs. Yield to Maturity
- How do I Calculate a Tax, Tag & Title in Florida?
- Taxable vs. Non-Taxable Interest-Rate Calculations
- How do I Calculate Car Loan Payments & Interest Rate?