What are Earnings Per Common Share?

Earnings per common share (EPS) is a measure of profitability that shows how much of a company’s profit is assigned to each of its common shares.

For example, a publicly traded company reports net income of $2 million and has 1 million common shares outstanding, giving it EPS of $2.00 per share — a figure investors use to compare profitability across companies and evaluate whether the share price is reasonable.

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