# Earnings per share (EPS)

**Definition:** [crh] A company's profit divided by its number of common outstanding shares. If a company earning $2 mill**Definition:** ion in one year had 2 million common shares of stock outstanding, its EPS would be $1 per share. In calculating EPS, the company often uses a w**Definition:** eighted average of shares outstanding over the reporting term. The one-year (historical or trailing) EPS growth rate is calculated as the percentage change in earnings per share. The prospective EPS growth rate is calculated as the percentage change in this year's earnings and the consensus forecast earn**Definition:** ings for next year.

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