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 $ 1,127,000 $ 1,134,600 net income (loss) 91,420 61,030 total assets 867,338 850,078 share information shares outstanding at year-end 61,400,000 69,200,000 preferred dividends 0 0 there were 74,400,000 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.)

(a) Earning per share in 2016: 0.85

(b) Earning per share in 2017: 1.4

Explanation:

Earning per share in 2016:

Net income (loss) = $61,030,000

Opening shares = 74,400,000

Ending shares = 69,200,000

Average no. of shares O/S =

                                     = 71,800,000

Earning per share =  

                              =  

                              = 0.85

Earning per share in 2017:

Net income (loss) = $91,420,000

Opening shares = 69,200,000

Ending shares = 61,400,000

Average no. of shares O/S =

                                     = 65,300,000

Earning per share =  

                              =  

                              = 1.4

The company’s earnings per share for each year will be 0.85 and 1.4.

The average number of shares will be the average of the opening and ending shares. This will be:

= (74400000 + 69200000) / 2

= 71800000

Earnings per share will be:

= Net income / Average number of shares

= 61030000/71800000

= 0.85

In 2017, the average number of shares will be:

= (69200000 + 61400000) /2

= 65300000

Earnings per share will be:

= 91420000 / 65300000

= 1.4

Therefore, the company’s earnings per share for each year will be 0.85 and 1.4.

Read related link on:

link