EPS is earnings per share or the after-tax profit per bonus share of shareholders after deducting preferential dividends. EPS is used by analysts as an indicator of a business’s profitability.
Recipe: EPS = (Profit after tax – preferred dividends)/Average number of outstanding shares
P/E: Represents the price that investors are willing to pay for a profit earned from a stock. This is an important index for stock valuation.
Recipe: P/E = Market price of stock / Earnings per share