EPS
Definition · Level 9 · Valuation
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Earnings per share: net income (after preferred dividends) ÷ weighted-average shares outstanding — the profit figure analysts forecast and the P/E ratio is built on.
Example
Net income $300M ÷ 100M shares = $3.00.
Where Tradecraft teaches it
Level 9 · Valuation, in the lesson “Per-share numbers and returns on capital”: Basic vs diluted EPS, dilution, buybacks, ROE, ROA, ROIC and DuPont.
Related terms
- Basic vs diluted EPSNet income per weighted-average share outstanding, versus the same figure including shares that options, RSUs, warrants and convertibles could create.
- DilutionGrowth in the share count from new issuance, option exercise, RSU vesting or convertible conversion, which shrinks each existing holder’s slice of…
- DuPontSplitting ROE into net margin × asset turnover × equity multiplier, to show whether returns come from profitability, efficiency or leverage.
- ROAReturn on assets: net income ÷ total assets — how much profit the entire asset base generates.
- ROEReturn on equity: net income ÷ shareholders’ equity — the return earned on the owners’ book capital.
- ROICReturn on invested capital: after-tax operating profit (NOPAT) ÷ the capital supplied by lenders and shareholders.