- How to Find Earnings Available for Common Stockholders
- How to Calculate Earnings Per Share on a Balance Sheet
- How to Calculate the Percentage of Earnings Retained
- How to Calculate Dividends Paid Out With Retained Earning & Net Income
- How to Calculate the Projected Stock Prices
- Cash Flow Per Share vs. Earnings Per Share
One of the financial disclosures publicly held company have to release is an income statement. The income statement details the various revenues and expenses that a company has for the year, which allows investors to calculate various financial ratios. The earnings per share of common stock measures the company's profits after paying preferred stock dividends, which shows how much the company could distribute per each share in a dividend, if it so desired.
Look up the company's net income on its income statement. If for some reason the company's income statement does not show the net income, subtract the company's expenses from the company's total revenues to find the company's net income.
Subtract the preferred share dividends paid from the company's net income. For example, if the company has $19 million in net income but pays $3.4 million in preferred stock dividends, that leaves $15.6 million in earnings available to common stockholders.
Divide the company's earnings per share of common stock by the number of common shares outstanding to find the earnings per share of common stock. Finishing this example, if the company has 1.3 million common shares outstanding, divide $15.6 million by 1.3 million to find the company has $12 in earnings per common share.