Question

In: Accounting

Dakota Inc. and Jersey & Company are two large companies that manufacture and sell equipment used...

Dakota Inc. and Jersey & Company are two large companies that manufacture and sell equipment used in the construction, mining, agricultural, and forestry industries. The companies reported the following data (in millions) for two recent years:

Dakota Jersey
Year 2 Year 1 Year 2 Year 1
Net income $2,142 $3,715 $1,905 $3,252
Average number of common shares outstanding 594 599 334 363

a. Determine the earnings per share in Year 2 and Year 1 for each company. Round your answers to two decimal places.

Year 2 Year 1
Dakota $ per share $ per share
Jersey $ per share $ per share

b. Evaluate the relative profitability of the two companies.

earnings per share for Year 1 and Year 2 are higher than . However, from Year 1 to Year 2, the earnings per share for both companies . The slowing world economy contributed to the from Year 1 to Year 2. Overall, appears to be the more profitable company.

Solutions

Expert Solution

  • All working forms part of the answer
  • Requirement ‘a’

--working

Dakota

Jersey

Year 2

Year 1

Year 2

Year 1

A

Net income

$              2,142.00

$             3,715.00

$             1,905.00

$             3,252.00

B

Average number of common shares outstanding

594

599

334

363

C = A/B

Earnings per share

$                       3.61

$                     6.20

$                     5.70

$                     8.96

--Answer

Year 2

Year 1

Dakota

$                3.61

$               6.20

Jersey

$                5.70

$               8.96

  • Requirement ‘b’

Earnings per share for Year 1 and Year 2 of ‘Jersey’ are higher than ‘Dakota’ . However, from Year 1 to Year 2, the earnings per share for both companies ‘have decreased’ . The slowing world economy contributed to the ‘decrease’ from Year 1 to Year 2. Overall, ‘Jersey’ appears to be the more profitable company.

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Dakota Inc. and Jersey & Company are two large companies that manufacture and sell equipment used...
Dakota Inc. and Jersey & Company are two large companies that manufacture and sell equipment used in the construction, mining, agricultural, and forestry industries. The companies reported the following data (in millions) for two recent years: Dakota Jersey Year 2 Year 1 Year 2 Year 1 Net income $2,107 $3,725 $1,905 $3,237 Average number of common shares outstanding 594 599 334 363 a. Determine the earnings per share in Year 2 and Year 1 for each company. Round your answers...
The two companies manufacture a piece of plastic used in automobile production. This plastic piece is...
The two companies manufacture a piece of plastic used in automobile production. This plastic piece is subject to wear during use. Therefore, it is desired to compare the amount of wear of plastic parts produced by the two companies. Friction wear was applied by taking samples of 25 units randomly from both companies and after 1000 cycles wear amounts were observed. The average wear for the first company was 20 mg / 1000 cycles and the standard deviation of wear...
Two major computer companies manufacture and sell computer accessories. The prices of 5 randomly selected accessories...
Two major computer companies manufacture and sell computer accessories. The prices of 5 randomly selected accessories are listed below: Computer Accessory Price Data Computer Accessory Macrohard Price ($) Pear Computer Price ($) keyboard 67.33 65 mouse 54.78 40.24 speaker 135.53 134.82 modem 100.31 95.71 monitor 377.62 352.36 The quality of the computer accessories for both companies are practically the same because both companies purchase the parts from the same wholesaler. Since the market for these accessories is very competitive, the...
You are analyzing two companies that manufacture electronic toys—Like Games Inc. and Our Play Inc. Like...
You are analyzing two companies that manufacture electronic toys—Like Games Inc. and Our Play Inc. Like Games was launched eight years ago, whereas Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal market share with sales of $200,000 each. You’ve collected company data to compare Like Games and Our Play. Last year, the average sales for all industry competitors was $510,000. As an analyst, you...
You are analyzing two companies that manufacture electronic toys—Like Games Inc. and Our Play Inc. Like...
You are analyzing two companies that manufacture electronic toys—Like Games Inc. and Our Play Inc. Like Games was launched eight years ago, whereas Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal market share with sales of $200,000 each. You’ve collected company data to compare Like Games and Our Play. Last year, the average sales for all industry competitors was $510,000. As an analyst, you...
You are analyzing two companies that manufacture electronic toys—Like Games Inc. and Our Play Inc. Like...
You are analyzing two companies that manufacture electronic toys—Like Games Inc. and Our Play Inc. Like Games was launched eight years ago, whereas Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal market share with sales of $300,000 each. You’ve collected company data to compare Like Games and Our Play. Last year, the average sales for all industry competitors was $765,000. As an analyst, you...
You are analyzing two companies that manufacture electronic toys - Like Games Inc. and Our Play...
You are analyzing two companies that manufacture electronic toys - Like Games Inc. and Our Play Inc. Like Games was launched eight years ago, whereas Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal market share with sales of $400,000 each. You've collected company data to compare Like Games and Our Play. Last year, the average sales for all industry competitors was $1,020,000. As an...
An electronics company is engaged in the manufacture of two components “Registers” and “Diodes” used in...
An electronics company is engaged in the manufacture of two components “Registers” and “Diodes” used in telecom tower sets. Each unit of “Register” and “Diode” costs the company Rs.6 and Rs.26 in wages and Rs.7 and Rs.17 in materials respectively. The company sells both the products on two-period credit terms but the company’s labour and material expenses must be paid in cash. The selling price per unit of Register is Rs.40 and per unit of Diode is Rs.90. Due to...
Splish Inc. was organized in late 2015 to manufacture and sell hosiery. At the end of...
Splish Inc. was organized in late 2015 to manufacture and sell hosiery. At the end of its fourth year of operation, the company has been fairly successful, as indicated by the following reported net incomes. 2015 $139,000a 2017 $206,000 2016 162,000b 2018 279,000 a Includes a $10,000 increase because of change in bad debt experience rate. b Includes a gain of $30,000. The company has decided to expand operations and has applied for a sizable bank loan. The bank officer...
See answer choices in bold. You are analyzing two companies that manufacture electronic toys—Like Games Inc....
See answer choices in bold. You are analyzing two companies that manufacture electronic toys—Like Games Inc. and Our Play Inc. Like Games was launched eight years ago, whereas Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal market share with sales of $800,000 each. You’ve collected company data to compare Like Games and Our Play. Last year, the average sales for all industry competitors was...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT