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Earnings Per Share



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Earnings Per Share or EPS is an important financial number that tells us the portion of a company's profit allocated to each outstanding share of common stock.

It speaks about the profitability of the company.

The EPS is as simple calculation. It can be obtained by dividing (Net Income - Dividend on Preferred Stock) with Average Outstanding Shares.

Okay. This might be confusing to some investors.

The best place to get EPS data is the Financial Results Statement that your company gives you or shares with the stock exchanges or other regulators.

An increase in EPS is often an indication of improved performance of the company.

There is no specific number as to how much EPS should be.

As you can make out from the EPS calculation formula, it will be more (or less) depending on the outstanding shares.

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