What is adjusted EPs?

Adjusted EPS is a type of EPS calculation in which the analyst makes adjustments to the numerator. Typically, this consists of adding or removing components of net income that are deemed to be non-recurring.

How is EPS used in valuation metrics?

EPS is also used in other valuation metrics, such as the Price-to-Earnings ( (P/E)) ratio, which is a company's share price divided by its earnings per share, and the Price/Earnings-to-Growth (PEG) ratio, which is the company's P/E divided by its growth rate over a certain period of time.

What is the difference between adjusted EPs and pro forma EPS?

Adjusted EPS: This is calculated by including or excluding items of net income that are one-offs, so may differ from basic EPS. In the case of exclusions, the adjusted EPS may be artificially high. Ongoing / pro forma EPS: This type of EPS is based on regular net income and excludes unusual or one-off events.