STOCK MARKET Study What is EPS & How to Calculate EPS


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This also one of the important FUNDAMENTAL Analysis parameter.

As name shows,

EPS - EARNING PER SHARE, that means the profit earned by each single share.

It is very important parameter which help in choosing share for investment.

Let's go and understand

what is EPS and how it is calculated.

Formula for EPS = Net Profit / No of Shares

Suppose any stock having 100 Cr. of free floating share (i.e No of Shares)  in the market available for trading and the stock having annual net profit of Rs.1000 Cr for current year. 

Then EPS  = Net Profit / No of shares 

                  = 1000 / 100 

                   = Rs.10 / shares.

For selecting good company for INVESTMENT the EPS should having positive growth trend.

For eg 
Ist year - 10 / Shares
2nd year - 15 / Shares 
3rd year - 20 / Shares
& so on......

Disclaimer : This article is not for knowledge and information sharing and not for any type of recommendation.

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