Question

The table below contains data on Fincorp Inc. The balance sheet items correspond to values at year-end 2015, while the income statement items correspond to revenues or expenses during the year ending in 2015. All values are in thousands of dollars.

2017 2018
Revenue $ 4,400 $ 4,500
Cost of goods sold 1,500 1,600
Depreciation 480 500
Inventories 290 320
Administrative expenses 530 580
Interest expense 210 210
Federal and state taxes* 530 550
Accounts payable 280 340
Accounts receivable 440 480
Net fixed assets† 4,500 5,270
Long-term debt 2,800 3,240
Notes payable 896 610
Dividends paid 440 440
Cash and marketable
securities 870 510
Taxes are paid in their entirety in the year that the tax obligation is incurred.
Net fixed assets are fixed assets net of accumulated depreciation since the asset was installed.
Suppose that Fincorp has 468,000 shares outstanding. What were earnings per share?

Answer 1

$1.60 and $2.26

Step-by-step explanation:

Income statement

2017( in thousand) 2018(in thousand)

Sales revenue

$,4000 $4,500

Less: expenses

Cost of goods sold

($1,500) ($1,600)

Depreciation

($480) ($500)

Administrative expenses

($530) ($580)

Interest expense

($210) ($210)

Federal and state taxes

($530) ($550)

Net income

$750 $1,060

Earning per share = Net income / Number of shares outstanding

Therefore,

Earning per share for 2017 = $750,000 / 468,000

= $1.60

Earning per share for 2018 = $1,060,000 / 468,000

= $2.26