Shareholders are a part owner of the company.

If the company gets profits indirectly shareholders will get profits, but the company not share their whole profit with shareholders. Because most of the company reinvest their profit for the company.

# What is Earnings Per Share (EPS)

EPS (Earning Per SHARE) means if a company share their profits with shareholders, so for one share how many shares will get to the shareholder.

If you calculate the profit of company divide by total no of outstanding shares you get the Earnings Per Share. By doing this you can know the how much money for one share.

Here is the formula for calculating EPS:

You can get the company net profit in profit and loss statement. Here is the link where you can get Profit and loss statement for the company.

If you want to find company outstanding number of shares then divide market capitalization with current share price.

### Example:

Let’s Calculate the Earnings Per Share of CDSL of the financial year 2016-2017.

Forgetting the CDSL outstanding share you divide Market Cap. With Current Share Price

Total no. Of Outstanding Shares= Market Cap/Current Share Price

CDSL of the financial year 2016-2017 net profit is 67.85 crore. So, let’s calculate the Earnings Per Share for CDSL which is given below:

EPS= Earnings / Total no. Of outstanding Shares

If you want to calculate accurate EPS for the company, here is the formula

EPS = (Earning – Preferred Dividend) / Total no. of outstanding shares.

If you want to see 5-6 years EPS of a company here is the link: EPS

If the company EPS is improving over in 5-6 years then the signal is good. When you do fundamental analysis then don’t analyze only 2-3 ratio. If any company eps is continually increasing by thinking this you can’t buy shares of that company. Eps is only a small part of fundamental analysis. While doing the fundamental analysis you have to do so many analysis.

### Whats Next?

Here is the 5 Best Option to Invest Money in 2018

### Now** It’s Your Turn…**

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