in theory. so the eps is just the number of free cash per each...

in theory. so the eps is just the number of free cash per each share on issue. sometimes companies elect to pay 100% as a dividend, but rarely. so there will be a difference between the eps $ and the dividend $ distribution more often than not as the money held back allows the company to invest in operations, expansions or acquisitions.

so imagine a company that has 2 shares on issue and generates $5 eps (total free cash of $10) ... company elects to pay a $3 dividend (total $6) and invest the remaining $4 into operations improvements. in theory the money reinvested should ensure dividends are bigger the following year.