What is 'Basic Earnings Per Share'
Basic earnings per share is a rough measurement of the amount of a company's profit that can be allocated to one share of its stock. Basic earnings per share (EPS) do not factor in the dilutive effects on convertible securities. Basic EPS is calculated as follows:
Basic EPS = (net income – preferred dividends) / weighted average number of common shares outstanding
If a company has a simple capital structure, meaning that it has not issued any potential dilutive securities, basic EPS can be a useful metric on its own.
BREAKING DOWN 'Basic Earnings Per Share'
For companies that have a complex capital structure (that is, they have issued potential dilutive securities), diluted EPS is considered to be a more precise metric than basic EPS. Diluted EPS takes into account all of the outstanding dilutive securities that could potentially be exercised (such as stock options and convertible preferred stock) and shows how such an action would impact earnings per share. Companies with a complex capital structure must report both basic EPS and diluted EPS to provide a more accurate picture of their earnings per share; basic EPS will always be the higher of the two. If the company has a simple capital structure, it only needs to report basic EPS.

Primary Earnings Per Share (EPS)
One of two methods for categorizing shares outstanding. The other ... 
Diluted Earnings Per Share  Diluted ...
Diluted Earnings Per Share (or Diluted EPS) is a performance ... 
Diluted Normalized Earnings Per ...
A company's profit less onetime earnings, divided by both outstanding ... 
Earnings Per Share  EPS
The portion of a company's profit allocated to each outstanding ... 
Cash Earnings Per Share  Cash ...
A measure of financial performance that looks at the cash flow ... 
Interim Earnings Per Share
A measure of earnings calculated at a specified time, shorter ...

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What does it signify about a company if there is a large difference between its EPS ...
Learn more about basic earnings per share and diluted earnings per share, what the ratios measure and what a large discrepancy ... Read Answer >> 
Why is a company's diluted EPS always lower than its simple EPS?
Learn about diluted and basic earnings per share and why a company's diluted earnings per share is usually lower than its ... Read Answer >> 
What is the difference between earnings per share (EPS) and diluted EPS?
Learn about EPS and diluted EPS, what they measure, and the difference between the two. Read Answer >> 
What's the difference between basic shares and fully diluted shares?
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How do I calculate earnings per share with simple capital and complex capital structure?
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What are the best uses for trailing EPS, current EPS and forward EPS?
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