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Home>Courses>Fundamental Analysis for Traders>Lesson 2 of 9

EPS and the P/E ratio

Earnings per share: a company's profit split across its shares.

Fundamental Analysis for Traders·Lesson 2 of 9

All lessons

By the end of this lesson you'll be able to:

  • 01Define EPS
  • 02Calculate EPS
  • 03Explain how EPS links to the P/E ratio
1

Step 1 · Read the guide

Read the guide first

Everything the quiz asks is covered in the linked guide. Read it, then answer the questions below.

What Is EPS? How Earnings Per Share Works
Key terms
EPSP/E RatioFinancial RatiosIntrinsic Value

Step 2 · Take the quiz

Quick check

10 questions

Answer all 10, then check. Wrong answers show a hint and a link back to the guide.

  1. Question 01

    What does EPS stand for?

  2. Question 02

    How is EPS calculated?

  3. Question 03

    A company earns $10m profit with 5m shares. What is EPS?

  4. Question 04

    What does rising EPS over time generally signal?

  5. Question 05

    EPS is a key input to which ratio?

  6. Question 06

    If price is $40 and EPS is $2, the P/E ratio is:

  7. Question 07

    Two firms have the same profit but one has more shares. What is that firm's EPS?

  8. Question 08

    What is a sudden EPS jump from a one-off asset sale?

  9. Question 09

    What does EPS help investors compare?

  10. Question 10

    What does diluted EPS account for?

Answered 0 of 10 · pass 70% (7/10) to complete

Fundamental Analysis for Traders2 of 9
  1. Fundamental analysis basics
  2. →EPS and the P/E ratio
  3. Key financial ratios
  4. Reading a balance sheet and cash flow
  5. Profitability: margins and EBITDA
  6. Dividends and yield
  7. Inflation and prices
  8. Central banks and interest rates
  9. GDP, jobs, and the economy
  10. ⚑Final Assessment· 20 Q