A financial analyst notes that Collier Corporation’s earnings per share have been rising steadily for the past five years. The analyst expects the company’s net income to continue to increase at the same rate as in the past. In forecasting future basic earnings per share, what special risk should the analyst consider if Collier’s basic earnings are significantly larger than its diluted earnings?
Answer to relevant QuestionsWhat is the meaning of the term expenses? Does the payment of cash by a business indicate that an expense has been incurred? Explain.Brown Consulting Services organized as a corporation on January 18 and engaged in the following transactions during its first two weeks of operation: Jan. 18 Issued capital stock in exchange for $30,000 cash. Jan. 22 ...Listed below are eight technical accounting terms introduced in this chapter: Realization principle.................Credit Time period principle..................Accounting period Matching ...Trafflet Enterprises incorporated on May 3, 2011. The company engaged in the following transactions during its first month of operations: May 3 Issued capital stock in exchange for $800,000 cash. May 4 Paid May office rent ...A statement of stockholders’ equity sometimes is described as an “expanded” statement of retained earnings. Why?
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