Also called Earnings per share

EPS

Profit for the last twelve months divided by the share count. Accounting profit, not cash, which is why Angie values the cash instead.

Updated 2026-09-03

Earnings per share is net profit divided by the share count. It is the denominator of every P/E ratio, and it is an accounting figure rather than a cash one.

That distinction is the reason Angie values companies on cash instead. Earnings per share can be moved by depreciation schedules, one-off charges, tax timing and provisions, none of which change what is in the bank. It can also be moved by buying back stock, which raises it without the business improving at all.

Watch for the difference between reported and adjusted EPS. Adjusted figures exclude items management considers unrepresentative, which is sometimes fair and sometimes a way of excluding costs that recur every single year.

See also

  • Trailing P/E — What the market pays today for each dollar the company earned last year.
  • Earnings yield — Earnings for every dollar invested, which makes a stock directly comparable to a bond yield. A company losing money has none.
  • Free cash flow — The cash left for investors after keeping the business running. This is the number a DCF actually values, taken from the most recent fiscal year.

← See this one in the deck

Educational content, not investment advice. Angie explains how a valuation is built so you can judge it yourself. What you do with that is your call.

IsiofiaIsiofia