Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share of common stock.

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Why are earnings per share (EPS) important?

EPS is important because it is a key indicator of a company's profitability and is used by investors to evaluate a company's financial health and growth potential.

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An easy way to understand earnings per share (EPS) is:

Think of it as the portion of a company's profit allocated to each share of stock. Higher EPS generally means the company is more profitable.

How to Calculate Earnings Per Share (EPS)

EPS = (Net Income - Preferred Dividends) / Weighted Average Number of Shares Outstanding

To calculate EPS, subtract preferred dividends (if any) from a company's net income, then divide the result by the weighted average number of outstanding shares. This measure helps investors evaluate a company's profitability on a per-share basis.

Monitoring Earnings Per Share (EPS) has been instrumental for us to gauge our financial health and profitability per share, which in turn influences investor confidence and our market valuation. This focus has helped maintain a robust investment inflow, supporting our innovation and expansion strategies.