Earnings per share

by Manshu on March 14, 2008

in Articles

Earnings per Share or EPS is calculated by dividing the profit after taxes or net profits by the total number of outstanding shares of a company. EPS indicates how much money the company is making per share.

So if a company made $100 as net profits and had 100 shares outstanding in the market, their EPS would be $1.

This calculation helps an investor to judge the profitability of the company. EPS is also needed to calculate the P/E ratio of a stock which is another popular way of estimating the price of a company.

{ 1 comment… read it below or add one }

Yogananda December 4, 2011 at 2:32 pm

Thank you


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