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Sunday, April 24, 2011

Earnings Per Share Formula & Example

Definition: Earnings Per Share (EPS) is a measure of profitability and it allows shareholders to compare one year's earnings with that of another year. It is calculated by dividing the net profit after taxes and preferred dividend by the total number of equity shares.

Formula:
Earnings per share = (Net profit after tax − Preference dividend) / No. of ordinary shares issued
Or,
EPS = Earnings

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