Skillsfirst Level 3 Certificate in Introduction to Financial Trading (RQF) - UNIT 1: Principles of financial trading
Skillsfirst Level 3 Certificate in Introduction to Financial Trading (RQF) - UNIT 2: Principles of Financial Planning and Cash Flow in Financial Trading
Skillsfirst Level 3 Certificate in Introduction to Financial Trading (RQF) - UNIT 3: Understanding financial trading techniques

EARNINGS PER SHARE (EPS)

EPS indicates the profitability of a company and can be both a positive or negative figure dependent on whether a company is making profits, or losses. The higher the EPS the better a company is performing.

Valuation ratio of a company’s current share price compared to its per-share earnings. It is basically telling you how much you are paying for a share compared to profit.

Trailing P/E – EPS is usually from the last four quarters.

Projected P/E – Estimates of earnings expected in the next four quarters.

The higher the P/E ratio the more the market is willing to pay for each pound of annual earnings. Sometimes it is referred to as the ‘Multiple’ The P/E ratio is only really useful for comparing companies within the same industry i.e. banking, tech stocks etc.

Scroll to Top