Question

Exercise 2-7

Suppose the following information is available for Callaway Golf Company for the years 2017 and 2016. (Dollars are in thousands, except share information.)

		2017		2016
Net sales		$ 1,120,000		$ 1,126,100
Net income (loss)		65,300		53,600
Total assets		855,338		838,078
Share information
Shares outstanding at year-end		64,507,000		66,282,000
Preferred dividends		0		0

There were 73,139,000 shares outstanding at the end of 2015.

(a)

What was the company’s earnings per share for each year? (Round answers to 2 decimal places, e.g. 15.25.)

2017 :		$
2016 :		$

Answer 1

Answers

• Requirement [a]

2017 :		$ 1.00
2016 :		$ 0.77

• Workings

Working #1 2016
A	2015 Shares outstanding	73,139,000
B	2016 shares outstanding	66,282,000
C = A + B	Total	139,421,000
D = C/2	Weighted average share outstanding	69,710,500
E	Net Income 2016	$53,600,000
F = E/D	Earnings per share	$0.77

Working #1 2017
A	2016 shares outstanding	66,282,000
B	2017 shares outstanding	64,507,000
C = A + B	Total	130,789,000
D = C/2	Weighted average share outstanding	65,394,500
E	Net Income 2017	$65,300,000
F = E/D	Earnings per share	$1.00