Formula

Earning Per Share = Net Profit/Total Share

Description

EPS(Earning Per Share) shows total earning of single share unit for a financial period.Normally, it is calculated on quarterly and annually. For quarter report, it shows EPS for this quarter.For annual report, it shows EPS for this year.When there is changes in total share quantity, most of the companies will use weighted share instead of total share to calculate the EPS.In this case, investor needs to take note on the calculation to prevent making wrong judgement because it can be very different when they use weighted share to calculate EPS if compared with calculation using total share. For difference between total share and weighted share, please refer Difference of total share and weighted share.For EPS, definitely, EPS is as higher as better because everyone also hope their companies can earn as higher as possible.

Example

If Company A has total 100,000 net profit for financial year 2006 and its total share is 1,000,000,
EPS=Net Profit/Total Share = 100,000 /1,000,000=0.1.
In this case, this company has RM0.10 or 10 sen earning per share for this financial year.

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