# Earnings per share (EPS) is an indicator of a company’s profitability and how its stocks are valued. EPS of a company is directly proportional to its…

Earnings per share (EPS) is an indicator of a company’s profitability and how its stocks are valued. EPS of a company is directly proportional to its net income. The net income of Tolut Inc. for this year has decreased by 10 percent from last year’s figures. Therefore, the company’s EPS would be less than what it was last year.