What does "earnings per share" (EPS) measure?

Earnings per share (EPS) is a financial metric that represents the portion of a company's profit allocated to each outstanding share of common stock. This calculation is vital for investors and analysts as it provides insight into a company's profitability on a per-share basis. EPS is typically computed by taking the net income of a company, subtracting any dividends paid on preferred stock, and then dividing by the weighted average number of outstanding shares during a specific period. This measure allows investors to understand how much profit the company is generating for each share they own, which can inform investment decisions and comparisons among companies in the same industry.

The other options do not capture the essence of EPS. Total revenue, while an important measure, reflects the overall income generated before any expenses are deducted. Future projected earnings refer to estimates based on current performance and growth potential but do not represent what has already been earned on a per-share basis. Market share deals with the portion of a market controlled by a company, which is unrelated to the calculation of earnings allocated to shares. Thus, the focus of EPS is specifically on profit attributable to each outstanding share, making it the correct answer.