Net income per share of common stock
Net income per share of common stock
See: Earnings per share
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Net Income per Share
In a given fiscal year, a publicly-traded company's profit divided by the number of shares outstanding. This is considered the single most important aspect in determining a share's price and value, because the calculation of earnings per share shows the amount of money to which a shareholder would be entitled in the event of the company's liquidation. In general, earnings per share apply only to common shares. It is calculated thusly:
Earnings per share = (net income - preferred dividends) / average shares outstanding.
Earnings per share = (net income - preferred dividends) / average shares outstanding.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved