Final answer:
In EPS calculations, Cash Flow is often used instead of earnings to avoid Earnings Pitfalls and to provide a more accurate representation of a company's financial health.
Step-by-step explanation:
Due to Earnings Pitfalls, Cash Flow is commonly substituted for earnings in EPS (Earnings per Share) calculations. This substitution is done because cash flow can provide a clearer, more accurate picture of a company's financial health, especially in cases where earnings may be affected by accounting practices, non-cash items, or one-time events. Therefore, analysts and investors often look at cash flow based EPS as a more reliable indicator of a company's performance.