Earnings per share
Also called: EPS, basic EPS
A company's net profit divided by its number of shares, showing the profit attributable to each share.
EPS = net profit attributable to shareholders ÷ number of shares. Companies report it at the bottom of the income statement, usually as basic EPS and diluted EPS; diluted EPS assumes that options and convertible securities have turned into shares.
Because EPS is per share, it changes when the share count changes, through new issues, buybacks, splits or bonus shares, even if total profit does not.
Example
A company with net profit of ₹240 crore and 12 crore shares has EPS of ₹20.
Learn more in these lessons
- The income statementHow do you read an income statement?
- Earnings per shareHow is earnings per share calculated?
- Revenue and earnings growthHow should you measure whether a company is really growing?
- The P/E ratioWhat does a P/E ratio tell you about a share?
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