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                           BEVERLY ENTERPRISES, INC.

                                  EXHIBIT 11.1

                      COMPUTATION OF NET INCOME PER SHARE

         THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 1996 AND 1995

                                  (UNAUDITED)

                (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                          THREE MONTHS ENDED             SIX MONTHS ENDED        
                                                                               JUNE 30,                     JUNE 30,             
                                                                      -------------------------     -------------------------    
                                                                         1996            1995           1996           1995        
                                                                      ----------      ---------     ----------      ---------    
<S>                                                                   <C>             <C>           <C>             <C>           
PRIMARY:                                                                                                                            
  Net income . . . . . . . . . . . . . . . . . . . . . . . . .        $   16,995      $  14,306     $   30,691      $  30,855     
                                                                                                                                  
  Preferred stock dividends  . . . . . . . . . . . . . . . . .                --         (2,062)           ---         (4,125)    
                                                                      ----------      ---------     ----------      ---------     
  Net income applicable to common shares   . . . . . . . . . .        $   16,995      $  12,244     $   30,691      $  26,730     
                                                                      ==========      =========     ==========      =========     
                                                                                                                                   
  Applicable common shares:                                                                                                        
    Weighted average outstanding shares during the period  . .            98,981         86,304         98,860         85,986     
    Weighted average shares issuable upon exercise of                                                                              
      common stock equivalents outstanding (principally                                                                            
      stock options) using the "treasury stock" method   . . .             1,098          1,560          1,168          1,607     
                                                                      ----------      ---------     ----------     ----------     
    Total  . . . . . . . . . . . . . . . . . . . . . . . . . .           100,079         87,864        100,028         87,593     
                                                                      ==========      =========     ==========     ==========     
                                                                                                                                   
  Net income per share of common stock   . . . . . . . . . . .        $     0.17      $    0.14     $     0.31     $     0.31     
                                                                      ==========      =========     ==========     ==========     
                                                                                                                                   
FULLY DILUTED:                                                                                                                     
  Net income   . . . . . . . . . . . . . . . . . . . . . . . .        $   16,995      $  14,306     $   30,691     $   30,855     
  Reduction of interest expense resulting from assumed                                                                             
     conversion of 7 5/8% convertible subordinated debentures .              --- (a)        --- (a)       --- (a)        ---  (a) 
  Reduction of interest expense resulting from assumed                                                                            
     conversion of 5 1/2% convertible subordinated debentures .            2,063            ---          4,126           ---      
  Reduction of interest expense resulting from assumed                                                                             
     conversion of zero coupon notes  . . . . . . . . . . . . .              --- (a)        --- (a)       --- (a)        ---  (a) 
  Less applicable income taxes  . . . . . . . . . . . . . . . .             (825)           ---         (1,650)          ---      
                                                                      ----------      ---------     ----------     ----------      
  Adjusted net income . . . . . . . . . . . . . . . . . . . . .           18,233         14,306         33,167         30,855      
  Preferred stock dividends . . . . . . . . . . . . . . . . . .              ---         (2,062)           ---         (4,125)     
                                                                      ----------      ---------     ----------     ----------      
  Adjusted net income applicable to common shares . . . . . . .       $   18,233      $  12,244     $   33,167     $   26,730     
                                                                      ==========      =========     ==========     ==========     
                                                                                                                                   
  Applicable common shares:                                                                                                        
    Weighted average outstanding shares during the period . . .           98,981         86,304         98,860         85,986 
    Assumed conversion of cumulative convertible                                                                                   
      exchangeable preferred stock  . . . . . . . . . . . . . .              --- (b)        --- (a)        --- (b)       --- (a)
    Weighted average shares issuable upon exercise of                                                                              
      common stock equivalents outstanding (principally                                                                            
      stock options) using the "treasury stock" method  . . . .            1,107          1,560          1,186          1,673 
    Assumed conversion of 7 5/8% convertible subordinated                                                                          
      debentures  . . . . . . . . . . . . . . . . . . . . . . .              --- (a)        --- (a)        --- (a)       --- (a)
    Assumed conversion of 5 1/2% convertible subordinated 
      debentures  . . . . . . . . . . . . . . . . . . . . . . .           11,253            ---         11,253           ---  
                                                                                                
    Assumed conversion of zero coupon notes . . . . . . . . . .              --- (a)        --- (a)        --- (a)       --- (a) 
                                                                      ----------      ---------     ----------      ---------     
    Total . . . . . . . . . . . . . . . . . . . . . . . . . . .          111,341         87,864        111,299         87,659     
                                                                      ==========      =========     ==========      =========     
                                                                                                                                   
   Net income per share of common stock . . . . . . . . . . . .       $     0.16      $    0.14     $     0.30      $    0.30     
                                                                      ==========      =========     ==========      =========     
</TABLE>

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(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.
