Question

Suppose the following information is available for Callaway Golf Company for the years 2022 and 2021. (Dollars are in thousands, except share information.) 2022 2021 Net sales $ 1,124,000 $ 1,130,500 Net income (loss) 85,062 69,184 Total assets 855,338 838,078 Share information Shares outstanding at year-end 70,000,000 71,770,000 Preferred dividends 0 0 There were 78,630,000 shares outstanding at the end of 2020. (a) What was the company’s earnings per share for each year?

Answer 1

Answer:

2021

Earnings per share = ( Net Income - Preferred dividends) / Weighted average number of shares

Weighted average number of shares = (Beginning share + Ending shares ) / 2

= (78,630,000 + 71,772,000) / 2

= $75,201,000‬

Earnings per share = 69,184,000 / 75,201,000

= $0.92

2022

Weighted average number of shares = (Beginning share + Ending shares ) / 2

= (71,772,000 + 70,000,000) / 2

= $70,886,000‬

Earnings per share = 85,062,000 / 70,886,000‬

= $1.20