Pacific Gas and Electric Company (PCG) is a large gas and electric utility operating in northern and central California. Three recent years of financial data for Pacific Gas and Electric are as follows (in millions):

a. Determine the earnings per share for Years 1–3.

b. Interpret the trend in earnings per share using horizontal analysis for the three years in terms of the change in earnings and average shares outstanding.

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Net income Preferred dividends Average number of common shares outstanding Year 3 $(7,642) $14 528 Year 2 $(6,837) $14 517 Year 1 $1,660 $14 512