Bundle: Financial & Managerial Accounting, Loose-leaf Version, 14th + Working Papers For Warren/reeve/duchac's Corporate Financial Accounting, 14th + ... Financial & Managerial Accounting,
14th Edition
ISBN: 9781337802000
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 12, Problem 1ADM
A.
To determine
Earnings per share:
Earnings per share represent the amount of income earned per share of outstanding common stock in a period. This ratio is used for analyzing the profitability of company’s stockholders’.
The following formula can be used to calculate earnings per share:
To compute: Earnings per share of Incorporation A and company W.
B.
To determine
To identify: The company which appears to be more profitable on the basis of earnings per share.
C.
To determine
To explain: The possible reasons behind the differences between the Incorporation A and Company W’s market price per share and earnings price per share.
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Analyze and compare Amazon.com and Wal-Mart
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Amazon.com, inc. is one of the largest Internet retailers in the world. Wal-Mart is the largest retailer in the United States. Amazon and Wal-Mart compete in similar markets; however, Wal-Mart sells through both traditional retail stores and the Internet, while Amazon sells only through the Internet. Earnings and Common Stock Outstanding information was obtained from recent financial statements for both companies as follows (in million): Amazon . Wal-Mart Net Income $2,371 $14,694 Average Number of Common Shares Outstanding. . $ 474 $ 3,207 Required: a. Determine the Earnings Per Share for each company. Neither company had Preferred Stock Outstanding. Round to the nearest cent. b. Which company appears more profitable from an Earnings-Per-Share perspective. c. The market price of Amazon Common Stock was $750 per share at a time when Wal-Mart's was $69 per share. How would you explain this difference in Market Price given the Earnings-Per-Share computed in (a) for both companies?
Identifying Comparables and Valuation using PB and PE
Tailored Brands Inc.'s book value of equity is $4.563 million and its forward earnings estimate per share is $1.10, or $55.7 million in total earnings. The following information is also available for TLRD
and a peer group of companies (identified by ticker symbol) from the specialty retail sector.
Market
Ticker Cap($ mil.)
TLRD
GCO
ZUMZ
GES
ANF
TLYS
M
585.7
789.7
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988.2
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1.00 9.699
1.95 14.17
2.07
13.19
1.00 19.69
1.68 11.6
0.75 5.458
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Growth Rate (T 4Q)
(0.47% 22.50%
(323.73) (5.86 ) %
3.28% 13.85%
(37.69% 1.90%
9.37% 6.35%
5.51% 13,93%
(1.74 % 16.70%
Debt-to-
Equity
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2.53
0.13
0.00
0.56
0.25
0.00
0.74
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Chapter 12 Solutions
Bundle: Financial & Managerial Accounting, Loose-leaf Version, 14th + Working Papers For Warren/reeve/duchac's Corporate Financial Accounting, 14th + ... Financial & Managerial Accounting,
Ch. 12 - Of two corporations organized at approximately the...Ch. 12 - A stockbroker advises a client to buy preferred...Ch. 12 - A corporation with both preferred stock and common...Ch. 12 - An owner of 2,500 shares of Simmons Company common...Ch. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - A corporation reacquires 60,000 shares of its own...Ch. 12 - The treasury stock in Discussion Question 7 is...Ch. 12 - What are the three classifications of restrictions...Ch. 12 - Prob. 10DQ
Ch. 12 - Dividends per share Zero Calories Company has...Ch. 12 - Entries for issuing stock On January 22, Zentric...Ch. 12 - Entries for cash dividends The declaration,...Ch. 12 - Entries for stock dividends Alpine Energy...Ch. 12 - Entries for treasury stock On May 27, Hydro...Ch. 12 - Reporting stockholders equity Using the following...Ch. 12 - Retained earnings statement Noric Cruises Inc....Ch. 12 - Dividends per share Seventy-Two Inc., a developer...Ch. 12 - Dividends per share Lightfoot Inc., a software...Ch. 12 - Entries for issuing par stock On January 22,...Ch. 12 - Entries for issuing no-par stock On May 15, Helena...Ch. 12 - Issuing stock for assets other than cash On...Ch. 12 - Selected stock transactions Alpha Sounds Corp., an...Ch. 12 - Issuing stock Willow Creek Nursery, with an...Ch. 12 - Prob. 12.8EXCh. 12 - Entries for cash dividends The declaration,...Ch. 12 - Prob. 12.10EXCh. 12 - Prob. 12.11EXCh. 12 - Effect of cash dividend and stock split Indicate...Ch. 12 - Selected dividend transactions, stock split...Ch. 12 - Treasury stock transactions Mystic Lake Inc....Ch. 12 - Prob. 12.15EXCh. 12 - Prob. 12.16EXCh. 12 - Reporting paid-in capital The following accounts...Ch. 12 - Stockholders Equity section of balance sheet The...Ch. 12 - Stockholders Equity section of balance sheet...Ch. 12 - Retained earnings statement Sumter Pumps...Ch. 12 - Prob. 12.21EXCh. 12 - Prob. 12.22EXCh. 12 - Dividends on preferred and common stock Pecan...Ch. 12 - Stock transactions for corporate expansion On...Ch. 12 - Selected stock transactions The following selected...Ch. 12 - Entries for selected corporate transactions Morrow...Ch. 12 - Entries for selected corporate transactions...Ch. 12 - Dividends on preferred and common stock Yosemite...Ch. 12 - Stock transaction for corporate expansion Pulsar...Ch. 12 - Selected stock transactions Diamondback Welding ...Ch. 12 - Entries for selected corporate transactions Nav-Go...Ch. 12 - Prob. 12.5BPRCh. 12 - Selected transactions completed by Equinox...Ch. 12 - Prob. 1ADMCh. 12 - Pacific Gas and Electric: Earnings per share...Ch. 12 - Caterpillar: Earnings per share Caterpillar Inc....Ch. 12 - BBT and Regions Financial: Earnings per share BBT...Ch. 12 - Ethics In Action Tommy Gunn is a division manager...Ch. 12 - Prob. 12.3TIF
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