Hi everybody, and welcome to Rhinance. What is earnings per share, or EPS? How do you calculate it? Why do investors use it? And how does it change over time? I'm going to answer all these questions and more in today's video.
Let's start by explaining what earnings per share is. Earnings per share is an investing metric used to measure the profitability of a company on a per share basis. It allows an investor to easily understand how profitable a company is, while also accounting for the
outstanding shares in the business. As a general rule of thumb, companies that have a higher earnings per share value are more profitable than those with a lower earnings per share value.
公司的流通在外股數。一般經驗法則是，每股盈餘數值較高的公司，比每股盈餘較低的公司更為獲利。
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Keep in mind that this is not an absolute measure of profitability. It is a measure of profitability measured on a per share basis. Okay, let's see how we can calculate the earnings per share of a company. The metric is calculated as net income, subtract any dividends,
then divided by the current shares outstanding. It is also useful to note that some companies may refer to net income as profit or earnings instead. Usually these terms all refer to the same thing and they are interchangeable. We just want a measure of how much money the company
has made after expenses. To find the inputs required to calculate earnings per share, you can look them up in the company's most recent annual or quarterly results, which are listed on their website. Alternatively, you can also use a financial information website or app,
such as Yahoo Finance, to find the earnings per share. Pull up whichever company you're interested in, find the financial metric section, and the earnings per share will be listed here.
So why is earnings per share useful to an investor then? It's useful because it allows you to compare the profitability of different companies, even though each company will have different profits and share amounts. It will be helpful to illustrate an example here of how it works.
Let's say you are trying to decide which company you should invest in, Bill's Bike Shop or Cameron's Carpets. To start, let's say Bill's Bike Shop has an annual profit of $4 million with $300,000 shares outstanding. To find the earnings per share of Bill's Bike Shop, we would take $4 million
假設您正試著決定應該投資哪家公司，是 Bill's Bike Shop 還是 Cameron's Carpets。首先，假設 Bill's Bike Shop 的年利潤為 400 萬美元，流通在外股數為 30 萬股。要找出 Bill's Bike Shop 的每股盈餘，我們會用 400 萬美元
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and divide by 300,000 shares. This gives us an earnings per share figure of $13.33 per share.
除以 30 萬股。這得出每股盈餘數字為 13.33 美元。
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What this means is that for each share in the company, the company produces $13.33 worth of profits. Now let's have a look at Cameron's Carpets. Cameron's Carpets has a yearly profit of $50 million, pays $2 million in dividends annually, and has 6 million shares outstanding.
To find the earnings per share, we would start with $50 million, subtract the dividend payments of $2 million, and lastly divide by 6 million shares. Here we get an earnings per share figure of $8 per share. Now that we have consistent metrics, we can compare Bill's Bike Shop to Cameron's
Carpets. What we see is that even though Cameron's Carpets is a larger company with higher profits, remember they generated $50 million in profit as compared to Bill's Bike Shop which only generated $4 million in profit, Bill's Bike Shop actually has a better earnings per share figure
Carpets。我們看到的是，即使 Cameron's Carpets 是一家規模更大、利潤更高的公司——記得他們產生了 5000 萬美元的利潤，而 Bill's Bike Shop 只產生了 400 萬美元的利潤——Bill's Bike Shop 的每股盈餘數字實際上更好，
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at $13.33. What this is telling us is that when you account for the number of shares that exist in the companies, Bill's Bike Shop generates more profit per share than Cameron's Carpets.
達到 13.33 美元。這告訴我們的是，當您將公司存在的股數納入考量時，Bill's Bike Shop 每股產生的利潤比 Cameron's Carpets 更多。
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So if you were to make a $1,000 investment in Bill's Bike Shop, that $1,000 investment would give you the rights to more profits than if you were to make the same $1,000 investment in Cameron's Carpets. Earnings per share is a metric that will often change depending on two
factors, the profit of the company and the amount of shares outstanding in that company.
因素：公司的利潤以及該公司的流通在外股數。
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To start, let's see what happens to the earnings per share when the profit of a company changes.
首先，讓我們看看當公司利潤變動時，每股盈餘會發生什麼變化。
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Let's assume that the number of shares in the company stays the same between quarter to quarter.
假設公司的股數在季度之間保持不變。
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If this company now generates higher profits this quarter over last quarter, the earnings per share figure will rise. Inversely, if the company generates less profit this quarter over last quarter, the earnings per share figure will fall. So this is pretty straightforward.
More profits results in higher earnings per share and less profits results in lower earnings per share.
更多利潤導致更高的每股盈餘，更少利潤導致更低的每股盈餘。
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On the other end of the spectrum is the number of shares outstanding.
在另一端的是流通在外股數。
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For now, let's assume the profit of a company stays roughly equal while the number of shares outstanding can change. If, during any given quarter, a company issues more shares, their earnings per share will fall. This is because you have the same amount of profit
that now has to be divided up between more shares. The earnings per share has to fall since the profit is now split between more shares than before.
現在必須在更多股票之間進行分配。每股盈餘必須下降，因為利潤現在要在比以前更多的股票之間進行分配。
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Lastly, if a company reduces the number of shares outstanding while maintaining the same profit level, the earnings per share will increase. This is similar to how the previous example worked, but now there are less shares to split that same amount of profit between so the earnings per share
is higher. Because of how this relationship works, this is one reason why a company may choose to buy back their own shares. This is known as a stock buyback. When the company buys back their own shares in the market, that removes shares from the total pool of shares outstanding
and sends their earnings per share higher. Keep in mind that earnings per share is just one metric of many that an investor has at their disposal. Earnings per share should be used in parallel with other investing metrics when evaluating stocks and making financial decisions.
Thanks for watching today. If you enjoyed the video or learned something new, leave it a like. Have a question that I didn't answer, leave me a comment down below, and I would be more than happy to help.
If you enjoyed the content, hit the subscribe button to support the channel.
如果你喜歡這個內容，請點擊訂閱按鈕支持這個頻道。
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You can also check out my stock market basics playlist here for similar videos on other
你也可以在這裡查看我的股市入門播放清單，以獲取關於其他內容的類似影片
What Is EPS In Stocks? | Earnings Per Share Explained
📝 影片摘要
本單元深入講解每股盈餘（EPS）的概念與應用。EPS是衡量公司每股獲利能力的關鍵指標，計算方式為淨利減去股息後，除以流通在外股數。影片透過Bill's Bike Shop與Cameron's Carpets的比較案例，說明即使公司規模不同，EPS也能提供標準化的獲利比較基準。此外，課程也探討EPS如何受公司利潤與股數變動影響，並解釋股票回購如何提升EPS。最後提醒投資人應將EPS與其他指標綜合運用，以做出更全面的財務決策。
