Earnings Per Share (EPS) is one of the most important figures that you need to be aware of when selecting companies to invest in or even when analysing your current portfolio.

It is calculated by taking the net profit of the company and dividing that figure by the total number of shares outstanding.

As a smart investor you will be looking to purchase companies which have a steadily growing earnings per share.

A declining trend for EPS indicates that the company is becoming unprofitable over time. A negative EPS means that the profit is negative – or in plain english – it means that the company has not made a profit – it has made a financial loss.