1. Finance
  2. Revenue & Profit

Earnings Per Share


Represents the portion of a company's profit allocated to each outstanding share of common stock. It's a widely used metric for evaluating a company's profitability relative to its shareholders. Rising EPS can attract investors, while a declining EPS may raise concerns.


(Net Income - Dividends on Preferred Stock) / Average Outstanding Shares


If net income is $50,000, no dividends on preferred stock, and there are 10,000 shares, EPS = $50,000 / 10,000 = $5/share.