Earnings Per Share - EPS
The most widely used ratio, it tells how much profit was generated on a per share basis.
= | Net Income - Dividends on Preferred Stock |
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Average Outstanding Shares |
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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.
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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