Have you ever wondered why investors and analysts focus so much on earnings per share and not as much on net income? It's because companies can have very different amounts of common shares outstanding. Thus, investors don't just want to see a company's net income, they want to see its net income attributable to each common share of stock. If you have two companies that both have $20 million of net income and zero preferred dividends, but one company has 1 million common shares outstanding while the other company has 20 million shares outstanding, the first company will have earnings per share of $20 ($20m / 1m) compared to earnings per share of just $1 ($20m / 20m) for the other company. If you own a single share of each company, your "share" of the profits from the one company is $20 compared to just $1 for the other company, …
