What is the profit per share

Public companies must report earnings per share (EPS) below the net income in their income tax return. This is mandated by the generally accepted accounting practices (GAAP). The EPS gives investors a means of determining the amount of the company earned on its investments on the part of the stock. In other words, EPS tells investors how net income, the company obtained for each stock share they own. It is calculated by dividing net income by the total number of shares of capital. It is important to shareholders who wish to net income of the company to be communicated to them on a basis by hand so that they can compare with the price of their shares.

Private companies did not report EPS because shareholders focus more on total net income of the company.

Publicly held companies reported in fact two figures of the EPS, except if they have what is called a simple capital structure. Most publicly held companies have complex structures of capital and will have to declare two figures of the EPS. One is called the EPS basis;the other is called the dilué.Base EPS EPS is based on the number of stock shares are outstanding. Diluted shares outstanding and shares may be issued in the future in the form of stock options-based.

It is clear that it is a complex process.An accountant has adjust the formula for the EPS for any number of occurrences or changes in company .a business may issue additional shares of stock in the year and buy back some of its own actions.Ou might emit several classes of stock, which will cause a net income divided between two or more pools - a pool for each class of stock.Une merger, acquisition or divestiture will also impact the formula of the EPS.