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Earnings per share (EPS) is perhaps the most widely used ratio there is in the investing realm.
What It Measures
The portion of a company’s profit allocated to each outstanding share of a company’s common stock.
Why It Is Important
Earnings per share is simply a fundamental measure of profitability that shows how much profit has been
generated on a per-share-of-stock basis. Were the term worded as profit per share, the meaning certainly
would be much clearer, if not self-evident.
By itself, EPS doesn’t reveal a great deal. Its true value lies in comparing EPS figures across several
quarters, or years, to judge the growth of a company’s earnings on a per-share basis.
More Info
Article:
• Wayman, Rick. “Types of EPS.” Investopedia. Online at: www.investopedia.com/articles/
analyst/091901.asp