Introduction to EPS (Earnings Per Share) for Kids and Teens
This video explains the concept of Earnings Per Share in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about EPS, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Kindergarten
- Elementary School
- Middle School
- High School
The topics covered are:
- What is EPS
- What exactly does Earnings Per Share mean
- Example of EPS
- Do you get an amount equal to EPS if you own a stock
Howdy Wall Street Willy.
In the newspaper, I read something about EPS. But…
What is EPS anyway?
EPS stands for Earnings Per Share.
EPS is the profit, or earnings, of the company for one year, divided by the number of stocks that the company has.
Earnings Per Share or EPS = Earnings of the Company for a Year / No. of Stocks of the Company
What exactly does Earnings Per Share mean?
As you know, the ownership in a company is defined by stocks.
EPS is the amount of the company’s earnings assigned to each stock.
EPS Calculation: Could you give me an example?
If a company has 100 stocks, and has made a profit of $50 in the year, the EPS is $50 (its earnings), divided by 100 (the number of stocks it has).
So the EPS for that company will be 50 cents per share.
Earnings Per Share or EPS = $50 / 100 = $0.50
So if you own 5 stocks in the company, your share would be 5 times 50 cents, or $2.50.
Your Share =5 X $0.50 = $2.50
If I own one stock of the company, do I get an amount equal to the EPS every year?
No, EPS is what each share earns. However, it is not what you get as a stockholder.
You only get a portion of the EPS. The remaining is usually reinvested by the company to improve its operations – like for buildings and factories.
The portion you get as a stockholder is called a dividend.
Thank you very much for telling me about EPS, Wall Street Willy.
You’re welcome, Sooper Cooper. Remember, finance is your friend!
Video Featured in the Below Financial Literacy Course for Kids & Teens
Download Transcript: Ideal for Use by Teachers in their Lesson Plan to Teach Kids & Teens
Podcast: What is EPS (Earnings Per Share)?
Fun, informative and concise episodes by a 10-year old, breaking down complex financial concepts in a way that kids and beginners can understand. Episodes cover personal finance topics like saving, investing, banking, credit cards, insurance, real estate, mortgage, retirement planning, 401k, stocks, bonds, income tax, and more, and are in the form of a conversation between a cowboy (a finance novice) and his friend, a stock broker. Making finance your friend, only at Easy Peasy Finance.
A little bit about me: I have been fascinated with the world of personal finance since I was 6! I love to read personal finance books, and keep myself updated on the latest by reading various personal finance magazines. My friends often ask me questions about finance because they find it complex and intimidating. That’s what inspired me to start my YouTube channel called Easy Peasy Finance when I was 8, and this podcast 2 years later.
All you need to know about EPS or Earnings Per Share: What is EPS, example of EPS, calculation of EPS, how much money you get in your hands if you own stock in a company (EPS vs dividend), and more.
Show notes and transcript at: https://easypeasyfinance.com/what-is-eps-earnings-per-share/
Were does that 2.50 go that you got from the eps?
$2.50 for 5 shares, or $0.50 per share is the Earnings Per Share (EPS). A portion of it is distributed as dividend, and the remaining gets reinvested to expand the operations of the company.
Can you suggest an EPS Calculator for me? I want this, and your articles are very good and helpful thank you.
Hi Readul,
You don’t need a calculator for EPS: the EPS for publicly traded companies is readily available on financial websites like Yahoo Finance.