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
Chapter 11, Exercises #25
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
OfficeMax 84,908,000
Staples 715,596,000
a. Determine the earnings per share for each company. Round to the nearest cent.
b. Evaluate the relative profitability of the two companies.
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Answer
a. b. Staples' net income of $881,948,000 is much greater than OfficeMax's net income of $71,155,00…View the full answer
Related Book For 
Corporate Financial Accounting
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac
ISBN: 978-1133952411