I am trying to figure out the P/E ratio, mainly. But first I need to figure out the EPS (earnings per share). I have read that to calculate price/earnings ratios you must find its earnings of last year (e.g. If a stock is selling for $35 now and its earnings last year were $7 a share, the P/E ratio would be 5 [35/7=5]).

The formula for earnings per share, as I have looked up, is: enter image description here

So for a Coca Cola share, its EPS of last year would be:

{$7098 (net income) - $0.31 ([?]dividends per share)}/4300861009

which would equal: 1.6502951351246515020778714962653e-6

It seems I have gone VERY wrong somewhere. Can anyone walk me through how to find Earnings per Share, so that I may calculate the current P/E of Coca Cola?

Here is where I am analyzing the stock from: http://www.theglobeandmail.com/globe-investor/markets/stocks/summary/?q=ko-N

  • EPS is available from the company's yearly statement to shareholders, and pretty widely available on the web, unless you're defining it differently...?
    – keshlam
    Commented Mar 20, 2015 at 2:38
  • I realize that it is easy to find, but I am asking how to use the formula to discover the EPS. In other words, I would like to be shown how to calculate EPS, "hands on".
    – Kelsey
    Commented Mar 20, 2015 at 4:14

2 Answers 2


You're missing a very important thing:

YEAR END values in (U.S.) $ millions unless otherwise noted

So 7098 is not $7,098. That would be a rather silly amount for Coca Cola to earn in a year don't you think? I mean, some companies might happen upon random small income amounts, but it seems pretty reasonable to assume they'll earn (or lose) millions or billions, not thousands.

This is a normal thing to do on reports like this; it's wasteful to calculate to so many significant digits, so they divide everything by 1000 or 1000000 and report at that level. You need to look on the report (usually up top left, but it can vary) to see what factor they're dividing by.

Coca Cola's earnings per share are $1.60 for FY 2014, which is 7,098/4450 (use the whole year numbers, not the quarter 4 numbers; and here they're both in millions, so they divide out evenly).

You also need to understand that "Dividend on preferred stock" is not the regular dividend; I don't see it explicitly called out on the page you reference. They may not have preferred stock and/or may not pay dividends on it in excess of common stock (or at all).

  • Great answer, thank you. How did you find the 4450 number? and also, how would I go about finding out whether they pay dividends or not, in terms of the formula?
    – Kelsey
    Commented Mar 22, 2015 at 18:26
  • 1
    4450 was on the page, selecting Annual instead of by quarter. I'm not sure how you'd find out about the preferred dividends, presumably that's public knowledge in their shareholder report but perhaps it's in a more useful source.
    – Joe
    Commented Mar 24, 2015 at 21:05
  • I'm sorry, but I have tried to CTRL+F "4450" but I do not see it on the page, even after selecting Annual. Thank you, again, for the great answer.
    – Kelsey
    Commented Mar 24, 2015 at 21:21
  • Diluted weighted average shares 4,450 - it includes a comma. Most of the way down the table.
    – Joe
    Commented Mar 24, 2015 at 21:24

Market cap should be share price times number of shares, right? That's several orders of magnitude right there...


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