Concept explainers
Caterpillar: Earnings per share
Caterpillar Inc. is the world’s leading manufacturer of construction and mining equipment. In addition, Birinyi Associates identified Caterpillar as one of the top five companies to repurchase their own shares in a recent year.12 Three recent years of earnings and average common shares outstanding data for Caterpillar are as follows (in millions):
Year 3 | Year 2 | Year 1 | |
Net income Average number of common shares outstanding |
$3,695 617.2 |
$3,789 645.2 |
$5,681 652.6 |
A. Determine the earnings per share for Years 1-3 Caterpillar had no
B. Interpret the trend in earnings per share using horizontal analysis for the three years in terms of the change in earnings and average shares outstanding.
Trending nowThis is a popular solution!
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,
Additional Business Textbook Solutions
Accounting For Governmental & Nonprofit Entities
Advanced Financial Accounting
Fundamentals Of Financial Accounting
Principles of Accounting Volume 2
Intermediate Accounting
Fundamentals of Cost Accounting
- Brunleigh Corporation earned net income of $200,000 this year. The company began the year with 10,000 shares of common stock and issued 5,000 more on April 1. They issued $7,500 in preferred dividends for the year. What is Brunleigh Corporations weighted average number of shares for the year?arrow_forwardAnalyze Pacific Gas and Electric Company Pacific Gas and Electric Company (PCG) is a large gas and electric utility operating in northern and central California. Three recent years of financial data for Pacific Gas and Electric are as follows (in millions): a. Determine the earnings per share for Years 13. Round to the nearest cent. b. Interpret the trend in earnings per share using horizontal analysis for the three years in terms of the change in earnings and average shares outstanding.arrow_forwardErrol Corporation earned net income of $200,000 this year. The company began the year with 10,000 shares of common stock and issued 5,000 more on April 1. They issued $7,500 in preferred dividends for the year. What is the numerator of the EPS calculation for Errol?arrow_forward
- Given the following year-end information, compute Greenwood Corporations basic and diluted earnings per share. Net income, 15,000 The income tax rate, 30% 4,000 shares of common stock were outstanding the entire year. shares of 10%, 50 par (and issuance price) convertible preferred stock were outstanding the entire year. Dividends of 2,500 were declared on this stock during the year. Each share of preferred stock is convertible into 5 shares of common stock.arrow_forwardRebert Inc. showed the following balances for last year: Reberts net income for last year was 3,182,000. Refer to the information for Rebert Inc. above. Also, assume that the market price per share for Rebert is 51.50. Required: 1. Compute the dollar amount of preferred dividends. 2. Compute the number of common shares. 3. Compute earnings per share. (Note: Round to two decimals.) 4. Compute the price-earnings ratio. (Note: Round to the nearest whole number.)arrow_forwardRebert Inc. showed the following balances for last year: Reberts net income for last year was 3,182,000. Refer to the information for Rebert Inc. above. Also, assume that the dividends paid to common stockholders for last year were 2,600,000 and that the market price per share of common stock is 51.50. Required: 1. Compute the dividends per share. 2. Compute the dividend yield. (Note: Round to two decimal places.) 3. Compute the dividend payout ratio. (Note: Round to two decimal places.)arrow_forward
- Jupiter Corporation earned net income of $90,000 this year. The company began the year with 600 shares of common stock and issued 500 more on April 1. They issued $5,000 in preferred dividends for the year. What is Jupiter Corporations weighted average number of shares for the year?arrow_forwardBastion Corporation earned net income of $200,000 this year. The company began the year with 10,000 shares of common stock and issued 5,000 more on April 1. They issued $7,500 in preferred dividends for the year. What is the EPS for the year for Bastion?arrow_forwardPacific Gas and Electric Company is a large gas and electric utility operating in northern and central California. Three recent years of financial data for Pacific Gas and Electric Company are as follows: Fiscal Years Ended(in millions) Year 3 Year 2 Year 1 Net income $(6,837) $1,660 $1,407 Preferred dividends $14 $14 $14 Average number of common shares outstanding 517 512 499 a. Determine the earnings per share for fiscal Year 3, Year 2, and Year 1. Round to two decimal places. Negative amount should be indicated by the minus sign. Year 3 Earnings $fill in the blank 1 per share Year 2 Earnings $fill in the blank 2 per share Year 1 Earnings $fill in the blank 3 per share b. Evaluate the growth in earnings per share for the three years in comparison to the growth in net income for the three years. Round your answers to the nearest whole percentage. Negative amount should be indicated by the minus sign. Earnings per share growth as a…arrow_forward
- Pacific Gas and Electric Company is a large gas and electric utility operating in northern and central California. Three recent years of financial data for Pacific Gas and Electric Company are as follows: Fiscal Years Ended Year 3 Year 2 Year 1 Net income $880 $1,470 $810 Preferred dividends $16 $16 $16 Average number of common shares outstanding 484 468 444 b. Evaluate the growth in earnings per share for the three years in comparison to the growth in net income for the three years. Round your answers to the nearest whole percentage. Negative amount should be indicated by the minus sign. Earnings per share growth as a percent of Year 1 (base year) Year 3 fill in the blank 4% Year 2 fill in the blank 5% Year 1 Earnings fill in the blank 6% Net income growth as a percent of Year 1 (base year) Year 3 fill in the blank 7% Year 2 fill in the blank 8% Year 1 Earnings fill in the…arrow_forwardThe company recorded the following indicated earnings per share (EPS) in the last five years YEAR EPS 1 10 2 8 3 15 4 16 5 20 You also have data on other similar companies in the real estate sector which are already listed at the local stock exchange Comparable Firm Market Price Per share (MPS) Earnings Per Share (EPS) A 15 10 B 100 60 C 50 60 D 30 25 Extracts from the books of the company reveal the following Ordinary Share Capital (Sh. 1.5 Par value) Sh. 300 Million Borrowings Sh. 75 Million Required: Estimate the price per share for the company. Clearly state the assumptions taken into consideration in your analysis and computationarrow_forwardSuppose the following information (in millions of dollars) is available for Limited Brands for a recent year: sales revenue $9,360; net income $200; preferred dividend $0; and weighted-average shares outstanding 377 million. Compute the earnings per share for Limited Brands. (Round answer to 2 decimal places, e.g. 15.25.) Earnings per share $arrow_forward
- Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningManagerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College