Earnings per Share (EPS)

Earnings per share measures the amount of profit attributable to each ordinary share. It is calculated by dividing profit attributable to ordinary shareholders by the weighted average number of shares.

Earnings per share (EPS) shows profit attributable to ordinary shareholders per share. It enhances comparability and is based on weighted-average shares (basic and diluted).

- Used in day-to-day bookkeeping and journal entries to record transactions correctly.
- Used when preparing trial balances and reconciling accounts.

- Example: Accountants use **Earnings per Share (EPS)** when recording transactions and preparing the trial balance.

- Why it matters: Ensures accurate records, supports reliable reporting, and reduces posting and reconciliation errors.