🎯 Goal: Divide company profit by shares to get earnings per share.
Buying a stock means owning part of a company. EPS (earnings per share) = profit ÷ shares — what each share "earns". A dividend is profit paid out in cash to shareholders; the rest is retained to reinvest.
Let’s explore
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A share = a slice of the company cake. More shares means each slice is smaller.
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EPS = profit ÷ shares. It's profit per single share — the base for valuation later.
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A dividend is cash paid to shareholders. Fast-growing firms often retain profit instead of paying it.
Practice activity
🧮 A company earns 4B with 2M shares. What is EPS?
Worked example: EPS = 4,000,000,000 ÷ 2,000,000 = 2,000đ/share. If it pays an 800đ/share dividend, it retains 1,200đ to reinvest.
Quick quiz
1. How is EPS computed?
→ Profit ÷ shares
2. Earn 6B, 3M shares. EPS?
→ 2,000đ
3. What is a dividend?
→ Profit paid in cash to shareholders
4. A fast-growing company usually?
→ Retains profit to reinvest
5. Owning a stock means?
→ Owning part of a company
🎯 Real-life mission
Find a listed company you know. Look up (roughly) its annual profit and share count, then compute EPS = profit ÷ shares. Note the figure and where you found it.