Question

Traner, Inc. reported the following for the current year:

Average common shares outstanding 200,000
Average stockholders' equity $810,000
Market price per share $22.00
Net income $215,000
Sales revenue $810,000
Average total assets $1,620,000
Interest expense $100,000 What is the earnings per share for the current year?
A. 10.75%
B. 26.54%
C. 37.67%
D. 93.02%
E. None of the above

Answer 1

To calculate the earnings per share (EPS), divide the net income by the average number of common shares outstanding and multiply by 100 to get the percentage.

Step-by-step explanation:

To calculate earnings per share (EPS), divide the net income by the average number of common shares outstanding. In this case, the net income is $215,000 and the average common shares outstanding is 200,000. So, EPS = $215,000 / 200,000 = $1.075. However, the question asks for the earnings per share as a percentage, so we need to convert the EPS to a percentage. We can multiply the EPS by 100 to get the percentage. Therefore, the earnings per share for the current year is 10.75%.