<p>Earnings Per Share (EPS) is a key metric in fundamental analysis, representing a company's profit divided by the number of outstanding shares. It provides a snapshot of a company's profitability on a per-share basis, helping investors evaluate its performance and compare it with other companies or its own historical data.</p>

<h2>How It Works</h2>
<p>EPS is calculated by dividing the company's net income by the number of outstanding shares. The formula is:</p>
<p><strong>EPS = Net Income / Outstanding Shares</strong></p>
<p>For example, if a company has a net income of $100,000 and 10,000 outstanding shares, its EPS would be $10.</p>

<h2>Why It Matters</h2>
<p>EPS is crucial for investors as it helps them understand the intrinsic value of a company's shares. Here's why it matters:</p>
<ul>
  <li><strong>Profitability Assessment:</strong> EPS helps investors determine if a company is making a profit or loss.</li>
  <li><strong>Comparability:</strong> It allows investors to compare the profitability of different companies, even if they have a different number of outstanding shares.</li>
  <li><strong>Growth Analysis:</strong> By tracking EPS over time, investors can see if a company's profitability is increasing, decreasing, or staying the same.</li>
  <li><strong>PE Ratio Calculation:</strong> EPS is a key component in calculating the Price-to-Earnings (P/E) ratio, another important fundamental metric.</li>
</ul>