Earnings per share is a calculation that investors use to work out how much a company earns, for every share that they have outstanding. It is a useful measure for investors as it gives them an idea of how they can expect to earn from their investment.
For example, if an individual invests $100 into a stock, with the company earning $50 per share in a given year, it would be considered to be a fantastic investment. Likewise, if the company earns just $0.50 per share in a given year, it would be considered to be a terrible investment.
To calculate the earnings per share of a company, you just need to divide the earnings of that company by the number of shares that they have outstanding. If you do not know what the number of shares outstanding is for a particular company, then you can use the market capitalisation instead. So, if a company earns $5m and has 500k shares outstanding, the earnings per share figure would be $10.