Earnings per Share

Measures company earnings created for each share of stock.

The Earnings Per Share (EPS) compares Net Earnings to the Average Shares Outstanding, and is simply how much earnings have been generated per one share of stock during the period reported.

As a company's earnings increase, Earnings per Share will look better, but keep in mind other things can affect Earning Per Share: share buybacks the company may conduct (resulting in less shares), or the company releasing more shares, which increases the number of total shares further diluting the Net Earnings.

Tags: Financial Ratio