<PAGE>
 
                                                                    EXHIBIT 11.1

              CENTENNIAL HEALTHCARE CORPORATION AND SUBSIDIARIES
                       COMPUTATION OF EARNINGS PER SHARE
                                  (UNAUDITED)
                   (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED    SIX MONTHS ENDED
                                                                        JUNE 30,            JUNE 30,
                                                                     1998       1997       1998     1997
                                                                    -----      ------     ------   ------ 
<S>                                                                <C>         <C>       <C>       <C>
Income before dividends and accretion on preferred stock.........  $ 3,834     $1,884    $ 7,660   $ 3,125
Dividends and accretion of preferred stock.......................        -       (432)              (1,219)
                                                                   -------     ------    -------   -------
Income applicable to common stock................................  $ 3,834     $1,452    $ 7,660    $1,906
                                                                                        
Weighted average common shares outstanding.......................   11,910      4,789     11,888     4,799
                                                                                        
BASIC EARNINGS PER COMMON SHARE..................................  $  0.32     $ 0.30    $  0.64    $ 0.40
                                                                   =======     ======    =======    ======
                                                                                        
Income applicable to common stock................................  $ 3,834     $1,452    $ 7,660    $1,906
Interest savings on convertible debt (net of tax)................       24          -         48         -
                                                                   -------     ------    -------   -------
Income applicable to common stock................................  $ 3,858     $1,452    $ 7,708    $1,906
                                                                                        
Weighted average common shares outstanding.......................   11,910      4,789     11,888     4,799
Dilutive effect of stock options.................................      180         39        200        38
Conversion of convertible debt...................................      125          -        125         -
                                                                   -------     ------    -------   -------
Average diluted common shares outstanding........................   12,215      4,828     12,213     4,837
                                                                                        
DILUTED EARNINGS PER COMMON SHARE................................  $  0.32     $ 0.30    $  0.63    $ 0.39
                                                                   =======     ======    =======    ======
 
</TABLE>