The following data are available for Saffron City, a large discount retailer.

Required:
(a) Compute Saffron City€™s earnings per share and cash flow per share for each year.
(b) For each year, express Saffron City€™s earnings per share as a percentage of its cash flow per share.
(c) What factors possibly accounted for Saffron City€™s net cash flow from operating activities being less than the firm€™s net income in 2007 and 2009? Why would a potential investor in this firm want to identify these factors?

Transcribed Image Text:

2007 2008 2009 Net Income Net Cash Flow from $ 88,935,0O $121,392,500 $184,085,00 Operating Activities 106,782,500 90,490,000 108,142,500 Weighted-Average Number of Common Shares Outatanding 165,765,00168202,500 172,522,500 Preferred Stock Dividends Paid 1,930,000