Determinants of Earnings Per Share (EPS): An Empirical Analysis Using Panel Data Methods in Indian Insurance sector

Abstract Earnings Per Share (EPS) is a fundamental financial metric used to gauge a company's profitability and financial health. This study investigates the determinants of EPS using panel data methods, incorporating financial performance indicators such as Gross Profit, Net Profit, Return on Net Worth to Equity, Return on Capital Employed, Liquidity Ratio, Turnover Ratio, and Valuation Ratio. Employing Pooled OLS, Fixed Effects, and Random Effects models, this research assesses the explanatory power of these financial ratios in influencing EPS. Empirical findings suggest that Net Profit and Return on Net Worth to Equity are the primary drivers of EPS, while other financial ratios exhibit limited influence. A Hausman test confirms that the Fixed Effects model is the most appropriate for this study. These findings provide valuable insights for investors and financial analysts in making informed decisions regarding firm profitability and valuation.