Learn how to calculate EPS, a financial ratio that indicates a company’s ability to produce net profits for common shareholders. See different versions of the EPS formula, an example calculation, and a video explanation. Learn what EPS (Earnings Per Share) means, its formula , how to calculate it, and why it matters for investors. Explore key importance and limitations in detail. Earnings per share (EPS ) measures a company's profit per share of common stock. Learn what EPS means, how to calculate it, and why it matters to investors. What is Earnings Per Share ( EPS )? Earnings per share ( EPS ) is a key metric used to determine the common shareholder’s portion of the company’s profit. EPS measures each common share’s profit allocation in relation to the company’s total profit. IFRS uses the term “ordinary shares” to refer to common shares. The EPS figure is important because it is used by investors and analysts to assess company performance, predict future earnings, and estimate the value of the company’s ...
