Find net income for the period
Subtract preferred dividends, if any
Determine the weighted average number of common shares outstanding
Divide net income available to common shareholders by the weighted average common shares outstanding
Use this formula: EPS = (Net Income – Preferred Dividends) / Weighted Average Common Shares Outstanding
For diluted EPS, include the effect of convertible securities, options, and warrants
Recalculate using the diluted weighted average shares outstanding if required