Learn how to calculate earnings per share (EPS) and why it is an important gauge in determining a stock’s value and the profitability of a company.

In cell B7, input the formula "=B6/B5" to render the EPS ratio. Earnings per share (EPS) is an important profitability measure used in relating a stock's price to a company's actual earnings.

To calculate a company's P/E ratio, divide the price of one share of that company's stock by the earnings per share (often abbreviated EPS) of that company’s stock over a period of 12 months.

You can also calculate the dividend payout ratio by taking the dividend per share and dividing by the earnings per share, or EPS: Dividend per share / earnings per share = dividend payout ratio $4 ...

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The basic P/E formula simply divides the current stock price by the company's earnings per share. So let's say a company has a P/E ratio of 10. In effect, that means you'd be paying $10 for every ...