What is 'Earnings Per Share  EPS'
Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company's profitability.
Calculated as:
When calculating, it is more accurate to use a weighted average number of shares outstanding over the reporting term, because the number of shares outstanding can change over time. However, data sources sometimes simplify the calculation by using the number of shares outstanding at the end of the period.
Diluted EPS expands on basic EPS by including the shares of convertibles or warrants outstanding in the outstanding shares number.
BREAKING DOWN 'Earnings Per Share  EPS'
Earnings per share is generally considered to be the single most important variable in determining a share's price. It is also a major component used to calculate the pricetoearnings valuation ratio.
For example, assume that a company has a net income of $25 million. If the company pays out $1 million in preferred dividends and has 10 million shares for half of the year and 15 million shares for the other half, the EPS would be $1.92 (24/12.5). First, the $1 million is deducted from the net income to get $24 million, then a weighted average is taken to find the number of shares outstanding (0.5 x 10M+ 0.5 x 15M = 12.5M).
An important aspect of EPS that's often ignored is the capital that is required to generate the earnings (net income) in the calculation. Two companies could generate the same EPS number, but one could do so with less equity (investment)  that company would be more efficient at using its capital to generate income and, all other things being equal, would be a "better" company. Investors also need to be aware of earnings manipulation that will affect the quality of the earnings number. It is important not to rely on any one financial measure, but to use it in conjunction with statement analysis and other measures.
For more on EPS read The 5 Different Types Of Earnings Per Share (EPS) and How To Evaluate The Quality Of EPS

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 ... 
Cash Earnings Per Share  Cash ...
A measure of financial performance that looks at the cash flow ... 
Outstanding Shares
A company's stock currently held by all its shareholders, including ... 
Diluted Earnings Per Share  Diluted ...
Diluted Earnings Per Share (or Diluted EPS) is a performance ...

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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 is the weighted average of outstanding shares? How is it calculated?
The amount of shares outstanding in a company will often change due to a company issuing new shares, repurchasing and retiring ... 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 is the difference between weighted average shares outstanding and basic weighted ...
Outstanding shares refers to stock that is currently held by investors, including shares held by the public, and restricted ... 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 >>