Answer:
a. The earnings per share in Year 2 and Year 1 for Dakota would be as follows:
earnings per share in Year 1 is $6.29
earnings per share in Year 2 is $3.57
The earnings per share in Year 2 and Year 1 for Jersey would be as follows:
earnings per share in Year 1 is $8.75
earnings per share in Year 2 is 5.79
b. Dakota is the company with more profitability
Explanation:
a. In order to calculate the earnings per share in Year 2 and Year 1 for each company we would have to use the following formula:
earnings per share in Year x=Net income year x/Average number of common shares outstanding
Therefore, the earnings per share in Year 2 and Year 1 for Dakota would be as follows:
earnings per share in Year 1=$3,765/599=$6.29
earnings per share in Year 2=$2,122/594=$3.57
The earnings per share in Year 2 and Year 1 for Jersey would be as follows:
earnings per share in Year 1=$3,177/363=$8.75
earnings per share in Year 2=$1,935/334=5.79
b. The net income from Year 1 Year 2 of Dakota are higher than Jersey, so Dakota is the company with more profitability
