What is EPS?
Earning per share simply represents a company's net income divided by the number of shares of common stock outstanding. EPS is used by investors and analysts to evaluate a company's profitability, and it is also a key component in many stock valuation models.
How earning per share is calculated?
Earning per share is calculated by dividing the company's net income by the number of shares outstanding. EPS can be both positive and negative, depending on a company's profitability. In general, a higher EPS is better for shareholders, as it indicates that the company is generating more profit per share. EPS is an important measure of a company's financial health, and should be considered alongside other metrics such as revenue and operating cash flow.
Earning per share formula: Net income of the company/Outstanding Shares of the company