Dr. Paul Borosky, DBA, MBA
Business Consultant & Author
Guide 32 of 34 · Financial Ratios
How to Calculate Earnings Per Share (Apple Example)
A bigger pie, or the same pie cut into fewer slices?
Earnings per share is the profit that belongs to each share of stock. It is the most watched number on Wall Street. It can rise two ways: the company earns more, or the company buys back shares so there are fewer to divide by. Apple did both, and you can see exactly how much of each.
Last Updated: 10/27/2026 · Written by Dr. Paul Borosky, DBA, MBA
The Short Answer
What Is Earnings Per Share?
Textbook Definition
Earnings per share (EPS) equals net income divided by the number of common shares outstanding. It expresses a company’s profit on a per-share basis.
In Plain English
If you own one share, how much of the company’s profit is yours? Divide the profit by the number of shares. Fewer shares, or more profit, means a bigger slice for each owner.
Earnings Per Share
Net Income ÷ Shares Outstanding
Apple, fiscal 2025: $7.49
Dividend Payout Ratio
Dividends Paid ÷ Net Income
Apple, fiscal 2025: 13.8%
Net income is the last line of the income statement. Share counts appear in the 10-K. Public companies report a weighted average for the year, and diluted EPS adds options and stock awards.
One Real Company
Apple’s EPS, 2021 to 2025
Shares fell every year, from 16.7 billion to under 15 billion. Net income rose too, but more slowly. Both pushed EPS up.
| Line | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Net income ($M) | 112,010 | 93,736 | 96,995 | 99,803 | 94,680 |
| Shares (millions) | 14,949 | 15,344 | 15,744 | 16,216 | 16,701 |
| Earnings per share | $7.49 | $6.11 | $6.16 | $6.15 | $5.67 |
| Dividends paid ($M) | 15,421 | 15,234 | 15,025 | 14,841 | 14,467 |
| Dividend payout ratio | 13.8% | 16.3% | 15.5% | 14.9% | 15.3% |
Source: Apple Form 10-K filings, fiscal 2021 to 2025, as analyzed in the book.
The Method
How to Read EPS in 5 Steps
Calculate it.
Net income divided by shares outstanding. Use the weighted average share count the company reports.
Track the trend.
A rising EPS is what owners want. Apple went from $5.67 to $7.49 in four years.
Split the drivers.
Compare the growth in net income to the growth in EPS. The difference is the share count at work.
Check the payout.
Divide dividends by net income. A low payout plus big buybacks means the company returns cash mostly through buybacks.
Compare to price, not to rivals.
EPS in dollars means little across companies. Compare it to the stock price or to the company’s own history.
Why Apple’s Dividend Looks Small
A 14% payout looks stingy for one of the most profitable companies on earth. It is not. Apple returns most of its cash through buybacks of $78 billion to $95 billion a year, versus about $15 billion of dividends. The low payout is a choice of method, not a sign of hoarding. Buybacks also give the company flexibility: a dividend cut is big news, while a smaller buyback year barely makes headlines.
Compare It
Apple vs. Microsoft: A Bigger EPS Is Not a Better Company
| Latest fiscal year | Apple | Microsoft |
|---|---|---|
| Earnings per share | $7.49 | about $13.60 |
| Net income | $112B | $102B |
| Dividend payout ratio | about 14% | about 25% |
Microsoft’s fiscal year ends in June, Apple’s in September.
Microsoft’s EPS is almost twice Apple’s even though Apple earns more total profit. Microsoft simply has far fewer shares. Microsoft also leans more on dividends, while Apple tilts toward buybacks. Two philosophies, both legitimate.
The Buyback Effect
How Much of Apple’s EPS Growth Came From Buybacks?
Split the change from 2021 to 2025 into its two parts. The book’s numbers make it simple arithmetic.
Buybacks are not a trick. Each remaining share really does own a bigger slice. But EPS growth from buybacks costs cash, which you can trace in where buybacks go on the cash flow statement.
Beginner Traps
What Do Beginners Get Wrong About EPS?
- Comparing EPS dollars between two different companies.
- Assuming rising EPS always means rising profit.
- Ignoring the share count behind the number.
- Mixing up basic and diluted EPS.
- Calling a low dividend payout stingy without checking buybacks.
- Judging a payout over 100% as generous instead of risky.
How the Book Grades Apple’s Market Measures
From the Book
The Question Behind Every EPS Number
Market Measures · Earnings Per Share
Pie and Slices
So when you see EPS climbing, it is worth asking how much came from a bigger pie and how much came from cutting the pie into fewer slices.
EPS, dividends, and every ratio before them, run on Apple and graded. It is in the book.
Get the Book on Amazon →Small Business Version
You do not have shares, but you face the same choice: pay yourself, reinvest, or keep a cushion. Set aside for the tax bill first with how much to set aside for taxes. Want help planning owner pay against growth? See fractional CFO services.
Beyond the Book
Put These Numbers to Work on Your Own Business
The book teaches you to read the numbers. These three take you from reading them to using them.
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Earnings Per Share Questions
How do you calculate earnings per share?
Can EPS go up if profit stays flat?
What is a good dividend payout ratio?
What is the difference between basic and diluted EPS?
Keep Going
Related Guides
Every formula sits in the financial ratios cheat sheet.
Written by Dr. Paul Borosky, DBA, MBA, business consultant, author, and adjunct finance instructor with an MBA focused in finance.
This page is for general educational purposes only. It is not investment, financial, tax, accounting, or legal advice, and nothing here is a recommendation to buy or sell any security. Apple and Microsoft figures come from their public filings as analyzed in the book. Apple and Microsoft are trademarks of their respective owners, and this page is not affiliated with or endorsed by either company.