Caterpillar Deere Year 2 Year 1 Year 2 Year 1 $2,102 $3,695 $1,940 $3,162 Net income Average number of common shares outstanding 594 599 334 363 a. Determine the earnings per share in Year 2 and Year 1 for each company. Round to the nearest cent. b. Evaluate the relative profitability of the two companies.

Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter3: The Adjusting Process
Section: Chapter Questions
Problem 3.3ADM
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Caterpillar Inc. and Deere & Company are two large companies that manufacture and sell equipment used in the construction, mining, agricultural, and forestry industries. The companies reported the following data (in millions) for two recent years:

Caterpillar
Deere
Year 2
Year 1
Year 2
Year 1
$2,102
$3,695
$1,940
$3,162
Net income
Average number of common
shares outstanding
594
599
334
363
a. Determine the earnings per share in Year 2 and Year 1 for each company. Round to
the nearest cent.
b. Evaluate the relative profitability of the two companies.
Transcribed Image Text:Caterpillar Deere Year 2 Year 1 Year 2 Year 1 $2,102 $3,695 $1,940 $3,162 Net income Average number of common shares outstanding 594 599 334 363 a. Determine the earnings per share in Year 2 and Year 1 for each company. Round to the nearest cent. b. Evaluate the relative profitability of the two companies.
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