Earnings per share (EPS) is often considered to be one of the most important variables in determining a stock’s value, and it comprises the “E” part of the priceearnings (P/E) valuation ratio. EPS is calculated as:
EPS = net income / average outstanding common shares
The term “bottom line” refers to a company’s net earnings, net income or earnings per share. “Bottom line” describes the relative location of this figure on a company’s income statement: it typically is the last line at the bottom of the page; therefore, the bottom line. The figure, and being the last line on the page, reflects the fact that all expenses have already been subtracted from revenues (which appear towards the top of the page and are considered “top line” figures), and there is nothing left to subtract.
An income statement has four different components:
 Revenue – gross receipts earned by the company by selling its goods/services
 Expenses – costs to the company to earn the gross receipts
 Gains – income from nonbusiness related transactions
 Losses – the opposite of gains, losing money when selling a company asset
The last line on the income statement is “Net income” or “the bottom line”.

What is the formula for calculating earnings per share (EPS)?
Learn why earnings per share (EPS) is often considered to be one of the most important variables in determining a stock’s ... Read Answer >> 
What are the best uses for trailing EPS, current EPS and forward EPS?
The earnings per share (EPS) indicator has three basic types that can alert you to past, present and future health of a company. Read Answer >> 
What is the formula for calculating earnings per share (EPS) in Excel?
Understand the basics of the earnings per share ratio and how this important financial metric is calculated in Excel and ... Read Answer >> 
Why is a company's diluted EPS always lower than its simple EPS?
Learn about diluted and basic earnings per share and why a company's diluted earnings per share is usually lower than its ... Read Answer >> 
What does it signify about a company if there is a large difference between its EPS ...
Learn more about basic earnings per share and diluted earnings per share, what the ratios measure and what a large discrepancy ... Read Answer >> 
What is the difference between earnings per share (EPS) and diluted EPS?
Learn about EPS and diluted EPS, what they measure, and the difference between the two. Read Answer >>

Economics
Understanding the Top Line
Top line refers to a company’s gross sales without any reductions for discounts or returns. 
Investing
What's the Bottom Line?
The bottom line refers to the last line on a company’s income statement. This line shows net profit after all expenses, depreciation and taxes have been deducted from revenue. This is in contrast ... 
Markets
The 5 Types Of Earnings Per Share
A look at the five varieties of EPS and what each represents can help an investor determine whether a company is a good value, or not. 
Fundamental Analysis
Assess Shareholder Wealth With EPS
Find out if management is doing its job of creating profit for investors. 
Economics
The 5 Types Of Earnings Per Share
Understanding the many varieties of earnings per share will help investors make informed decisions. 
Active Trading
Value Investing: Finding Value In Income Statements
A company's income statement basically tells you how much money it has taken in and how much it has paid out over a year or a quarter. Looking at the annual income statement rather than a ... 
Fundamental Analysis
Calculating Basic Earnings Per Share
Basics earnings per share measures the amount of net income earned per share of outstanding stock. 
Insurance
Everything Investors Need To Know About Earnings
We go over the concepts behind the excitement over the most important figure in the stock market. 
Markets
Investment Valuation Ratios: Price/Earnings Ratio
By Richard Loth (Contact  Biography)The price/earnings ratio (P/E) is the best known of the investment valuation indicators. The P/E ratio has its imperfections, but it is nevertheless the most ... 
Forex Education
Earnings Per Share
Investing is a complex and often daunting experience, these equations are actually quite simple.

Bottom Line
Refers to a company's net earnings, net income or earnings per ... 
Earnings Per Share  EPS
The portion of a company's profit allocated to each outstanding ... 
Cash Earnings Per Share  Cash EPS
A measure of financial performance that looks at the cash flow ... 
Primary Earnings Per Share (EPS)
One of two methods for categorizing shares outstanding. The other ... 
Interim Earnings Per Share
A measure of earnings calculated at a specified time, shorter ... 
Basic Earnings Per Share
A rough measurement of the amount of a company's profit that ...