A company's net income divided by the number of outstanding shares, representing the portion of profit allocated to each share of common stock. EPS is a key measure of corporate profitability and a fundamental component of stock valuation.
Became standardized in the 1960s as stock markets grew and investors needed simple ways to compare profitability across companies of different sizes. The per-share format allows meaningful comparison regardless of company size or share count.
EPS is the ultimate democratic measure of corporate success - it tells you exactly how much profit each little piece of ownership earned! But here's the kicker: companies can manipulate EPS by buying back shares, making the denominator smaller even if actual profits don't grow, which is why smart investors always look at the full picture.
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