What calculation measures total annual net profit earned per individual share of common stock outstanding?

Explanation

• Basic Earnings Per Share (EPS) formula: $text{Basic EPS} = frac{text{Net Income} – text{Preferred Dividends}}{text{Weighted Average Common Shares Outstanding}}$.
• Diluted EPS accounts for potential dilution from convertible bonds, stock options, and warrants.
• EPS is a primary indicator of profitability used widely by equity analysts.