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Thursday, September 1, 2011

Growth Rate in Earnings per Share

The Earnings Per Share (EPS) growth rate is expressed as a percentage and shows the annualized rate of growth of EPS.

Formula:
EPS Growth Rate = (EPS at end - EPS at beginning) / EPS at beginning

Example 1:
The common stock of Company B has an EPS of $1.50 in Year 1, and $2.00 in Year 2. Thus, the change in EPS = 2.00 - 1.50 = $0.50, and then you simply divide the change in EPS by the earnings

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