What is Earnings Per Share (EPS): Basic EPS vs. Diluted EPS and How To Calculate Them?
Hello guys, Continuing on to my CFA journey, today I have studied about the Earnings Per Share (EPS) concept as presented in the CFA curriculum. I would like to put the findings here for me as well as for all of you. This will make it easier to revise and review the concepts when we get back to this topic again. So, let me put all the concepts into this blog post. What is Earnings Per Share (EPS)? EPS measures the portion of a company’s profit allocated to each outstanding share of common stock . It's a key metric for investors to gauge corporate performance. Earnings Per Share (EPS) is a foundational concept for equity analysis and plays a key role in evaluating a company’s profitability. CFA Relevance: EPS shows up in multiple places across the CFA curriculum, especially in: Financial Reporting & Analysis (FRA) : For analyzing income statements and understanding earnings quality. Equity Valuation : As input for models like the Price/Earnings (P/E) ratio. Ethics : Where mis...