Why Is Earnings per Share Important?

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Knowing the earnings per share (EPS) of a company can go a long way when deciding whether to invest in a particular company. EPS is a metric that quickly identifies stocks with the strongest potential profit growth.

It is important to determine a company’s EPS. But what is EPS, and how does it work?

EPS as a Metric

The EPS is the portion of a company’s net income shareholders earn per share if the company paid out all its shares. It indicates a company’s financial help.