Revenue, Earnings & EPS
The top line, the bottom line, and the per-share number the whole market quotes.
The StatementsBeginner 5 min read· Lesson 2 of 4 in Company Fundamentals
Revenue & earnings
Revenue is demand — the hardest number to fake sustainably; its growth rate and trajectory matter more than its size. Earnings (net income) is what survives all costs; earnings QUALITY means it recurs and converts to cash, not one-off gains.
EPS and its asterisks
EPS = net income ÷ shares outstanding — the market's per-share yardstick, and the 'E' in P/E. Two manipulable joints: buybacks shrink the denominator (EPS up, business unchanged — sometimes fine, sometimes cosmetic), and 'adjusted' EPS excludes whatever management prefers excluded. Compare GAAP vs adjusted; large chronic gaps are information.
Growth arithmetic
Durable EPS growth = revenue growth + margin change + buyback effect. Decompose it: growth driven purely by buybacks and 'adjustments' is a different (weaker) animal than demand-driven growth.