Earnings Per Share (EPS): Definition and Calculation
EPS measures a company’s profit allocated to each outstanding share. Use diluted EPS for a conservative view when calculating valuation ratios.
Exact formula
Diluted EPS accounts for convertible securities, options, and warrants.
Notes
- EPS (TTM) is commonly used for trailing valuation metrics.
- Share count changes (buybacks/issuance) affect EPS comparability.