Question

Internet Case 12.7 – Analyzing Stockholders’ Equity and EPS

(MUST POST FIRST) Initial Post – As an employee, write an internal memo to your manager addressing the following:

Using the Internet, locate the most recent annual report of a company of your choosing and write an initial post by responding to the following:

Do not research the company listed in the text.

1. For the most recent day indicated, what were the highest and lowest prices at which the company’s common stock sold?

2. Find the company’s balance sheet and determine the following: the number of outstanding shares of common stock and the average price at which those shares were originally sold.

3. What is the relationship between the current market price and the amount you have calculated in part b as the average price at which the stock originally sold?

4. Find the company’s income statement and identify the trend in basic earnings per share, including discontinued operations. Did discontinued operations have a significant impact on EPS?

5. For the most recent year, what is the average number of shares of common stock that was used to compute basic earnings per share? Why is that number different from the number outstanding in the company’s balance sheet?

Please help me answer these questions For AMD (Advanced Micro Devices). No hand written/photo answers. Thank you.

Answer 1

GIVEN INFORMATION :-

Analyzing Stockholders’ Equity and EPS (MUST POST FIRST) Initial Post – As an employee.And some other information. 1.For the most recent day indicated, what were the highest and lowest prices at which the company’s common stock sold?

2.Find the company’s balance sheet and determine the following: the number of outstanding shares of common stock and the average price at which those shares were originally sold.

3.What is the relationship between the current market price and the amount you have calculated in part b as the average price at which the stock originally sold?

4.Find the company’s income statement and identify the trend in basic earnings per share, including discontinued operations. Did discontinued operations have a significant impact on EPS?

5.For the most recent year, what is the average number of shares of common stock that was used to compute basic earnings per share? Why is that number different from the number outstanding in the company’s balance sheet?

REQUIRED:-

write an internal memo to your manager addressing .

ANSWER:-

MEMO

ANALYZING STOCKHOLDERS EQUILTY AND EPS (Amazon Inc.,)

THE MANAGER

30-08-2018

FROM

XYZ

SUB: important financial information about stockholder's Equity & EPS

I would like to bring in your attention some critical financial related data of Amazon inc 2016, 2017 $2018 financial year.

1.most recent day indicated, what were the highest and lowest prices at which the company’s common stock sold:-

For the latest day demonstrated (29-08-2018) , the most astounding and least costs at which the organization's normal stock sold are US;

AMZN 2001.75$

AMZN 1950.28$ RESPECTIVELY.

2. Attached is the company 's Total liabilities & Stockholder's Equity :-

The number of outstanding shares of common stock in 20167 & 2017 is 477 & 484 RESPECTIVELY

The average price at which those shares are originally sold in2016 & 2017 is 36.03 & 44.20 RESPECTIVELY

Par value of share = 0.01$

Additional paid up capital = 17186 &21289 in 2016 &2017 RESPECTIVELY that means in shares premium

Average price per share = total paid up capital including additional paid up capital / No of outstanding shares

Average price per share in 2017 = 2139 / 484

= 44.20$

3. Relationship between the current market price &the average price at which the stock originally sold:-

Current market cost of Amazon Inc. is $1998 and the normal cost ascertained to some degree 2 is $44.20 at which shares were initially sold. That is to say, once exchanging begins, share costs are generally dictated by the powers of free market activity. An organization that shows long haul income potential may draw in more purchasers, in this manner getting a charge out of an expansion in share costs.

4. Attached is the company 's company income statement:-

Trend in EPS is increasing significantly .

2016 , EPS was reported as 50.1 $ &

2017, it has incresed to 6.32& it indicates higher profitibility for shareholders.

5.The average number of shares of common stock that was used to compute basic earnings per share &that number different from the number outstanding in the company’s :

For the latest year, the normal number of offers of regular stock that was utilized to register essential profit per share is 480. Be that as it may, no. of remarkable offers is 484. This may be a direct result of following reason.

Essential EPS does not factor in the dilutive impact of extra securities. At the point when the capital structure of an organization incorporates investment opportunities, warrants and so on these ventures, if worked out, could expand the aggregate number of offers extraordinary in the market.