Quick Definition

Earnings Per Share (EPS) is a financial metric used to measure the profitability of a company on a per-share basis, indicating how much money a company makes for each share of its stock.

Formula

Examples

• 1A company with a net income of $10 million and 5 million shares outstanding has an EPS of $2.
• 2If a company's EPS increases from $1 to $2, it suggests improved profitability and potentially higher dividends for shareholders.
• 3During a fiscal year, a company that repurchases its own shares may see its EPS increase, even if its net income remains the same, due to fewer shares outstanding.

Tags