Earnings Per Share, usually the abbreviation EPS is used. It is a term that refers to the total earnings after taxes and preferred dividends are paid. The indicator can be described as a return on 1 share. It informs the shareholders about the size of earnings per common share, which could be paid out as dividends if the enterprise did not think about reinvestment.
EPS = Net earnings / Number of issued ordinary shares
Use of the EPS in practice: The ratio is used when comparing shares of different companies (note that the reported earnings can be affected by the financial policy of the enterprise).
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