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Earnings per share (EPS) is a commonly used barometer of how much money a company had earned for its shareholders. Note that a more precise calculation would also exclude the payment of preference dividends, as these are paid before ordinary dividends.

Let us imagine that XXX Inc (in which 1000 shares are issued) makes $10000 in a financial year. The company will in all likelihood need to pay corporation tax (say 20%) on its profit first. This gives total owner / shareholder earnings of $8000. Since there are 1000 shares issued in the company we can calculate that EPS for XXX Inc is $8.

The formula is the following:

EPS = net profit after tax / number of shares in issue