What is the formula for calculating Earnings Per Share (EPS)?

The formula for calculating Earnings Per Share (EPS) is indeed Net Income divided by Average Outstanding Shares. This approach provides a measure of the profitability of a company on a per-share basis, giving investors insight into how much money the company makes for each share of stock they own.

Using average outstanding shares rather than total shares outstanding is crucial because it accounts for any changes in the number of shares due to activities such as stock issuances or buybacks during the reporting period. This provides a more accurate representation of earnings allocated to each share. Thus, by using average figures, EPS reflects a more precise and stable measure of a company's earnings performance over the relevant time frame.

The other options do not appropriately reflect the calculation needed for EPS, as they use incorrect formulas or focus on the wrong components of financial data.