Earnings Per Share (EPS)
The Earnings per Share or EPS of a company is an amount of earnings in currency terms per each share of that company’s stock that is outstanding and on the open market.
As an example, if X company has 15,000,000GBP in earnings and X company has 100,000,000 shares outstanding and on the open market, then the earnings per share of X company is 15,000,000GBP / 100,000,000shares = .15GBP/share. Keep in mind that the EPS calculation does not include the amount of dividends paid to preferred stockholders.
The EPS calculation uses only the earnings divided by outstanding common shares of stock.
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