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Net Earnings
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| Earnings Per Share =
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Average Shares Outstanding
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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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