
<PAGE>   1
                           BEVERLY ENTERPRISES, INC.

                                  EXHIBIT 11.1

                      COMPUTATION OF NET INCOME PER SHARE

                   THREE MONTHS ENDED MARCH 31, 1996 AND 1995

                                  (UNAUDITED)

                (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)



<TABLE>
<CAPTION>
                                                                                              1996               1995     
                                                                                          ------------      -------------
<S>                                                                                       <C>               <C>   
PRIMARY:                                                                                                                      
 Net income  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..    $    13,696       $     16,549     
 Preferred stock dividends  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            ---             (2,063)    
                                                                                           -----------       ------------     
 Net income applicable to common shares   . . . . . . . . . . . . . . . . . . . . . . .    $    13,696       $     14,486     
                                                                                           ===========       ============     
  Applicable common shares:                                                                                                   
   Weighted average outstanding shares during the period  . . . . . . . . . . . . . . .         98,739             85,665     
   Weighted average shares issuable upon exercise of common stock equivalents                                                 
     outstanding (principally stock options) using the "treasury stock" method  . . . .          1,239              1,639     
                                                                                           -----------       ------------     
   Total  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         99,978             87,304     
                                                                                           ===========       ============     
                                                                                                                              
  Net income per share of common stock  . . . . . . . . . . . . . . . . . . . . . . . .    $      0.14       $       0.17     
                                                                                           ===========       ============     
FULLY DILUTED:                                                                                                                
 Net income   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    $    13,696       $     16,549     
 Reduction of interest expense resulting from assumed conversion                                                              
   of 7 5/8% convertible subordinated debentures  . . . . . . . . . . . . . . . . . . .           --- (a)             --- (a) 
 Reduction of interest expense resulting from assumed conversion                                                              
   of 5 1/2% convertible subordinated debentures  . . . . . . . . . . . . . . . . . . .          2,063                ---     
 Reduction of interest expense resulting from assumed conversion                                                              
   of zero coupon notes   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           --- (a)             --- (a) 
 Less applicable income taxes   . . . . . . . . . . . . . . . . . . . . . . . . . . . .           (825)               ---     
                                                                                           -----------       ------------     
 Adjusted net income    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    $    14,934       $     16,549     
                                                                                                                              
 Preferred stock dividends  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            ---             (2,063)    
                                                                                           -----------       ------------     
 Adjusted net income applicable to common shares  . . . . . . . . . . . . . . . . . . .    $    14,934       $     14,486     
                                                                                           ===========       ============     
                                                                                                                              
                                                                                                                              
 Applicable common shares:                                                                                                    
   Weighted average outstanding shares during the period  . . . . . . . . . . . . . . .         98,739             85,665     
   Assumed conversion of cumulative convertible exchangeable preferred stock  . . . . .            --- (b)            --- (a) 
   Weighted average shares issuable upon exercise of common stock equivalents                                                 
     outstanding (principally stock options) using the "treasury stock" method  . . . .          1,239              1,771     
   Assumed conversion of 7 5/8% convertible subordinated debentures   . . . . . . . . .            --- (a)            --- (a) 
   Assumed conversion of 5 1/2% convertible subordinated debentures   . . . . . . . . .         11,253                ---     
   Assumed conversion of zero coupon notes  . . . . . . . . . . . . . . . . . . . . . .            --- (a)            --- (a)  
                                                                                           -----------       ------------     
   Total  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        111,231             87,436     
                                                                                           ===========       ============     
                                                                                                                              
 Net income per share of common stock   . . . . . . . . . . . . . . . . . . . . . . . .    $      0.13       $       0.17     
                                                                                           ===========       ============     
</TABLE>                                                                       

_________________
(a)   Conversion would be anti-dilutive and is therefore not assumed in the
      computation of earnings per share of common stock.
(b)   The cumulative convertible exchangeable preferred stock was exchanged
      into 5 1/2% convertible subordinated debentures during the fourth 
      quarter of 1995.

