Ratio Analysis
Earnings Per Share ("EPS")
= |
Net Income - Dividends
on Preferred Stock |
|
Average Outstanding
Shares |
The most widely used
ratio, it tells how much profit was generated on a per share
basis.
| Things to remember |
- Diluted EPS means that the outstanding
shares include any convertibles or warrants outstanding.
- If the company issues more shares
then EPS are much harder to compare to previous years.
|
 |
 |
[Click
on the buttons above to see the financial statements] |
| For Cory's Tequila Co. |
| = $0.65 |
EPS Analysis:
The earnings per share ratio is mainly useful for companies
with publicly traded shares. Most companies will quote the
earnings per share in their financial statements saving you
from having to calculate it yourself. By itself, EPS doesn't
really tell you a whole lot. But if you compare it to the
EPS from a previous quarter or year it indicates the rate
of growth a company's earnings (on a per share
basis). Cory's Tequila Co.'s EPS have increased almost 50%
since last year, an excellent growth rate.
It should be noted that the 65 cents EPS is a "trailing"
number, using the previous 4 quarters of earnings. Some analysts
like to use "projected" EPS to analyze a stock's
current value using future estimates.
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