J. Bartley Pools Inc. reported the following in its financial statements for the quarter ended March 31,
Question:
March 31, 2014.
During the quarter ended March 31, 2014, Bartley reported Net Income of $5,000 and declared and paid cash dividends totalling $5,000.
Required:
1. Calculate earnings per share (EPS) and return on equity (ROE) for the quarter ended March 31, 2014.
2. Assume that Bartley repurchases 10,000 of its common shares at a price of $2 per share on April 1, 2014. Also assume that during the quarter ended June 30, 2014, Bartley reported Net Income of $5,000 and declared and paid cash dividends totalling $5,000. Calculate earnings per share (EPS) and return on equity (ROE) for the quarter ended June 30, 2014.
3. Based on your calculations in requirements 1 and 2, what can you conclude about the impact of a share repurchase on EPS and ROE?
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Fundamentals of Financial Accounting
ISBN: 978-1259103292
4th Canadian edition
Authors: Fred Phillips, Robert Libby, Patricia Libby, Brandy Mackintosh