What is EPS (earnings per share)?
A company’s earnings per share is its net profit minus its preferred dividends divided by its total number of outstanding shares. It shows how much of a company’s revenue could be distributed to investors. A high or increasing EPS is taken as a good sign by investors. On the other hand, a low or declining EPS can often deter investors as it could be an indicator of a downturn in a company’s performance.
EPS = Net Profit - Preferred Dividends / No. of outstanding shares
Please note that financial analyses and ratios should not be looked at in isolation when making investing decisions.
Introduction to stock trading
- What is a stock?
- Where do stocks come from?
- What is stock ownership?
- Why do people buy stocks?
- How could you lose money from buying stocks?
- What are stock markets?
- What is a stock broker?
- What is a stock price?
- What is a bid-offer spread?
- What are stock charts?
- What is commission?
- What are bullish vs bearish markets?
- What is technical analysis?
- What is fundamental analysis?
- What are analyst recommendations?
- What are stock financials?
- What is EPS (earnings per share)?
- What is a P/E ratio (Price-to-Earnings)?
- What is a P/CF ratio (Price-to-Cashflow)?
- What is ROE (Return on Equity)?
- What is Market Sentiment?
- What are Market Sentiment Indicators?
- What is the VIX?
- How does News and Social Media impact stocks?