Knowing the earnings per share (EPS) of a company can go a long way when deciding whether to invest in a particular company. EPS is a metric that quickly identifies stocks with the strongest potential profit growth.
It is important to determine a company’s EPS. But what is EPS, and how does it work?
EPS as a Metric
The EPS is the portion of a company’s net income shareholders earn per share if the company paid out all its shares. It indicates a company’s financial help.
The EPS tells you how much a company makes for each share. It is primarily used for estimating corporate value. An increasing EPS tells you a company is becoming more valuable. A decreasing EPS tells you the opposite….