For a recent year, OfficeMax and Staples are two companies competing in the retail office supply business. OfficeMax had a net income of $71,155,000, while Staples had a net income of $881,948,000. OfficeMax had preferred stock of $30,901,000 with preferred dividends of $2,527,000. Staples had no preferred stock. The average outstanding common shares for each company were as follows:
Average Number of
Common Shares Outstanding
a. Determine the earnings per share for each company. Round to the nearest cent.
b. Evaluate the relative profitability of the two companies.