Introduction: EPS
Earnings per share (EPS) is one of the most widely used ways to gauge company profitability.
EPS measures the net income earned on each share of a company's common stock. Basically, it gives you an idea of how profitable a company is.
How is EPS used?
1. There is no rule of thumb to interpret earnings per share of a company. The higher the EPS figure, the better it is. A higher EPS is the sign of higher earnings, strong financial position, and, therefore, a reliable company for investors to invest their money.
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