In this “What Is…?” series, we demystify investing terms for people who are just learning about the stock market. Here, let’s examine more about the term “earnings per share”. So, What Is Earnings Per Share (EPS)? EPS is the portion of a company’s earnings (also known as net profit) allocated to each outstanding share. It is an indicator of a company’s profitability as well. Tracking a company’s EPS over time shows how much the business has grown (or declined). Earnings Per Share Formula EPS is calculated by taking the net profit divided by the outstanding shares in the stock market. EPS = Earnings / Outstanding Shares This can be considered the basic EPS. There is also the diluted EPS, which is an expansion of basic EPS. Diluted EPS factors in the dilutive effects of convertible securities like stock options or warrants on the outstanding shares. With a larger denominator, diluted...