Earning Per Share EPS reliability

Fundamental Analysis
1

Hi Experts,

I am a newbie to trading and trying to learn concepts.
However while going through the EPS, i see that number is given too much of importance while i see the number is not giving the correct earning base line, as Company A might have 1 crore Share and a similiar Company B has 2 Crore. When they post their Earning, EPS of Company A will be higher even though when Company B posted slightly higher Profit than Company A, reason being number of shares issued.

Can any one help me understand this ? or it need to be interpreted differently?

Thanks
Mahesh G

2

use EPS for comparing same company performance over years or quarters…if you use it for comparing two different companies then it becomes vauge.

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3

Adding on to what is already said, look at P/E to compare different companies.

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