Plain-English definitions, reviewed by an independent investor
EPS (Earnings Per Share)
EPS shows how much profit a company made for each share you own. It is net income divided by the number of shares out…
EPS shows how much profit a company made for each share you own. It is net income divided by the number of shares outstanding.
EPS = Net Income ÷ Shares Outstanding
Why it matters
It turns a company’s total profit into a per-share number you can compare across firms of different sizes.
Common confusion
EPS can be inflated by buybacks that shrink the share count, so also check revenue and cash flow.
Frequently Asked Questions
What is a good EPS?
Higher is generally better, but compare within the same industry and check that it is growing over time.
Is EPS the same as profit?
No. Profit is the total; EPS is profit spread across each share.