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Spireframe Software, makers of Value Investor - the easiest way to learn stock analysis and valuation of stocks. Spireframe Software, makers of Value Investor - the easiest way to learn stock analysis and valuation of stocks.  
Earnings Per Share
Net Earnings 
 Earnings Per Share =
Average Shares Outstanding 

Explanation of Earnings Per Share:

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

Importance of Earnings Per Share:

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.

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