The term earning per share (EPS) refers to the net profit of a company divided by the number of company shares on issue. Earning per share refers to the amount of profit generated in terms of each stock of the company. The equation of calculating EPS can be illustrated in the following way:
Earnings per Share = Net Earnings After Tax / Number of Ordinary Shares
So from that equation, we can say that if a company has as much as $2 million worth of earnings and 600,000 shares outstanding, then the EPS of that company is going to be $2 million/600,000 = $3.33.
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