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# What Is Earnings Per Share?

Earning per share shows the profitability of the company, as EPS means to ALLOCATE those who share the OUTSTANDING part of PROFIT. You must know that earning means profit, OR per share means one share.

Earning per share means a share per profit, now if earning by share is increasing per year, then the profitability of the company is good, as the EPS of the company is increasing year by year.

Now, how can we calculate earning per share, so let's see from an example,

As the company's profit is 100 crore, or Outstanding shares 50 crore, to pay EPS here. 2 o (100 Crore / 50 Crore = 2)

EARNING PER SHARE = PROFIT / OUTSTANDING SHARES

Now, what are the outstanding shares, what is the issue that has been shared or the investor has, that means all the shares which are available in the market which are available for trade.

If earning per share for fundamental analysis of stocks in the Indian stock market has been increasing since the last few years then it can grow even further and if we take this share then we can profit.

### Price to Equity Ratio (PE RATIO)

In FUNDAMENTAL ANALYSIS, PE ratio is more used to select STOCK,The use of PE ratio is to compare how cheap or how expensive the share price is, Higher PE means that the share price can be expensive or that the share price will not go much further, or it will go a little bit further. Higher PE If the share of the industry is less than the industry PE, then the share price can increase. Generally, PE in stock is less in the bear market, or PE is more in the bull market, If the PE ratio of the company does not increase on a yearly basis then it is possible that you will not get a good return. PE RATIO is related to earning per share because to remove PE RATIO divide the CURRENT MARKET PRICE from earning per share,

PE quantitative relation = current market value / earning per share

Let's look at an example,

Company's current market price rs. 100 ha, or EPS rs. 2 O, then PE PE here will be RATIO 50.

If PE RATIO is high or you are thinking of taking share, then you have to keep in mind all the other terms of fundamental analysis of stocks in the Indian stock market, then you have to take a decision.

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