1. What is Earnings Per Share (EPS)?

Earnings Per Share (EPS) is a financial metric that indicates how much profit a company makes for each share of its stock. It's calculated by dividing net income by the number of outstanding shares.

2. How Does the Calculator Work?

The calculator uses the basic EPS formula:

Where:

• \( Net\ Income \) — Company's total earnings (after expenses and taxes)
• \( Shares\ Outstanding \) — Total number of shares currently held by all shareholders

Explanation: EPS shows the portion of a company's profit allocated to each outstanding share of common stock.

3. Importance of EPS Calculation

Details: EPS is a key indicator of a company's profitability and is widely used by investors to evaluate stock performance and compare companies.

4. Using the Calculator

Tips: Enter net income in your local currency and the total number of shares outstanding. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a good EPS value?
A: Higher EPS is generally better, but it varies by industry. Compare with competitors and historical performance.

Q2: What's the difference between basic and diluted EPS?
A: Basic EPS uses current shares outstanding, while diluted EPS accounts for potential shares from options, warrants, etc.

Q3: Can EPS be negative?
A: Yes, if the company reports a net loss, EPS will be negative.

Q4: How often is EPS calculated?
A: Typically quarterly and annually, reported in financial statements.

Q5: Why do companies report adjusted EPS?
A: Adjusted EPS excludes one-time items to show core business performance.