Earnings per share (EPS) is a fundamental ratio used as a measure of a company's profitability. In the United States, EPS appears in the companies' income statements.
Earnings per share is calculated by dividing the company's net income minus the dividends on preferred stock by the average shares outstanding.
Diluted EPS is another measure derived from the EPS. It is calculated by adding the shares of convertibles or warrants outstanding to the number of shares outstanding in the above formula.
