What Does Earnings Per Share - EPS Mean?
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.