Learn how to calculate earnings per share (EPS) and why it is an important gauge in determining a stock’s value and the profitability of a company.

David Kindness is a Certified Public Accountant (CPA) and an expert in the fields of financial accounting, corporate and individual tax planning and preparation, and investing and retirement planning.

and it is used in the calculation of other popular valuation metrics like the price-to-earnings (P/E) ratio. To calculate earnings per share, divide a company’s annual or quarterly profit by the ...

Estimates of a company’s future earnings usually are reported on a per-share basis, either for a quarter or a fiscal year. Earnings estimates are the projected profits of a company for a period.