EPS or Earnings Per Share is the total profit a company earns divided by the total number of shares.

A simple example: If a company earns ₹ 100 and it has issued 20 shares, the EPS is 5.

## Formula to Calculate EPS

EPS = Total Profit / Number of Shares

Real Company Example:

The Net Profit of Reliance Industries in the last four quarters is as follows:

- Q4 (Jan – Mar 2019): 10,362 crore
- Q1 (Apr – Jun 2019): 10,104 crore
- Q2 (Jul – Sep 2019): 11,262 crore
- Q3 (Oct – Dec 2019): 11,640 crore
- Total Profit (Jan – Dec): 43,368 crore

The total equity shares of Reliance Industries is 6,33,86,93,823 (633 crore).

4,33,68,00,00,000 (Profit) / 6,33,86,93,823 (Shares) = 68.41 (EPS)

Important points:

- In very simple words, EPS shows how much profit a company makes on every share that it has issued.
- EPS is used to calculate PE (Price to earning ratio). When current market price is divided by EPS, you get PE. Read more about PE.
- The EPS displayed on financial websites like Moneycontrol and Screener is based on the net profit a company has earned in the last four quarters.
- Analysts use ‘Forward EPS’ in their analysis of companies. This is based on the net profits a company is expected to earn in the future. ‘Forward EPS’ is based on assumptions made on the future, these are predictions that may not necessarily be accurate.

### EPS on Moneycontrol

To get earnings per share figures of a company, you no longer need to go through annual reports for the net profit numbers and then find the total number of shares.

All you need to do is, visit websites like Moneycontrol where information is provided and updated as soon as companies announce their financial results.

In our Reliance Industries example above, we calculated the EPS of Reliance Industries as 68.41 per share.

The screenshot below is from Moneycontrol, which shows the exact same EPS.

If you have any questions or doubts on EPS, kindly post them in the comments section below.

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