Ask a Fool: What Is Earnings Per Share?

Foolish analyst Andrew Tonner answers the question: What is earnings per share?

Earnings per share is net income divided by the total number of shares outstanding. Plainly put, it's the amount of money an investor earns for each share of a company's stock he or she owns.

Andrew points out that this figure can change drastically based on how much net income changes from period to period, but it can also change by the number of shares a company has outstanding. Shares outstanding can grow if a company issues more shares or decrease if they buy some back.

For context, Google's earnings per share in the most recent period were $34.21, more than twice what it was just a few years ago.

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The article Ask a Fool: What Is Earnings Per Share? originally appeared on Fool.com.

Andrew Tonner has no positions in the stocks mentioned above. The Motley Fool owns shares of Google. Motley Fool newsletter services recommend Google. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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