Curious Cat Investing Dictionary: Earnings per Share (EPS)

Earnings Per Share: subtract preferred stock dividends from net income and divide by the weighed average of outstanding common stock. Earnings are calculated using generally accepted accounting practices and like many accounting terms can be much more complicated in practice than it seems.

Since those accounting rules allow (and in fact require) so much judgement investors often look to operating cash flow to provide a comparison.

Related Terms: Resources: