What is earnings per share (EPS)?
Earnings per share (EPS) is an important metric in a company’s earnings figures. It is calculated by dividing the total amount of profit generated in a period, by the number of shares that the company has listed on the stock market.
EPS is used to determine the value attached to each outstanding share of a company. On exchanges, the amount of profit made by companies and the number of shares they have listed can vary, so EPS gives a per-capita way of evaluating each business. It is also a way for analysts to compare companies to each other and see which has higher earnings figures.