Earnings Per Share or EPS
EPS is defined as total earnings divided by the number of shares outstanding. It is an important indicator of a firm’s profitability. Comparing EPS of two companies is a convenient way to compare the earnings of companies since it is unlikely that any two companies will have the same number of shares outstanding. Moreover, it also useful in comparing the performance trend of a company in different accounting periods.
Net Income- Dividends On Preferred Stocks/Average Outstanding Shares