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| Earnings
Per Share - EPS |
= |
Net
Income - Dividends on Preferred Stock |
|
Average
Outstanding Shares |
|
The
most widely used ratio, it tells how much profit was generated on
a per share basis.
Things
to remember |
- Diluted
EPS means that the outstanding shares includes any convertible's
or warrants outstanding.
- If
the company issues more shares then EPS are much harder
to compare to previous years.
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[Click
on the image(s) above to see the financial statements] |
For
Cory's Tequila Co. |
=
$0.65 |
|
EPS
Analysis:
The earnings per share ratio is mainly useful for companies with
publicly traded shares. Most companies will quote the earnings
per share in their financial statements saving you from having
to calculate it yourself. By itself, EPS doesn't really tell you
a whole lot. But if you compare it to the EPS from a previous
quarter or year it indicates the rate of growth a companies earnings
are growing (on a per share basis). Cory's Tequila Co.'s EPS have
increased almost 50% since last year, an excellent growth rate.
It should be noted that the 65 cents EPS is the "trailing"
number, using the previous 4 quarters of earnings. Some analysts
like to use "projected" EPS to analyze a stock's current
value in respect to these estimates.
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