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Suppose the following information is available for Callaway Golf Company for the years 2017 and 2016
Suppose the following information is available for Callaway Golf Company for the years 2017 and 2016. (Dollars are in thousands, except share information.) 2017 2016 Net sales Net income (loss) $ 1,127,000 108,900 874,338 $ 1,134,000 57,680 857,078 Total assets Share information 62,800,000 69,200,000 Shares outstanding at year-end Preferred dividends 0 0 There were 75,000,000 shares outstanding at the end of 2015. (a) What was the company's earnings per share for each year? (Round answers to 2 decimal places, e.g. 15.25.) X 2017 : X 2016 : |
Expert Solution
| 2017 | $0.80 |
| 2016 | $1.65 |
Working:
earnings per share = net income / average shares outstanding.
consider 2016:
average shares outstanding = (shares at year end of 2015 + shares at year end of 2016) / 2
=> (69,200,000+75,000,000) /2
=>72,100,000.
earnings per share of 2016 (note that net income is given in thousands dollars) = $57,680,000 net income /72,100,000 average shares
=>$0.80 per share.
consider 2017:
average shares outstanding = (69,200,000 at end of year 2016 +62,800,000 at end of year 2017) / 2
=> 66,000,000
earnings per share of 2017 = $108,900,000 net income of 2017 / 66,000,000 average shares.
=>$1.65 per share.
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