I need help with these (Financial Statement Analysis), thank u sm!

14. A financial analyst notes that Lexi Carver Corporation's earnings per share have been rising steadily for the last five years. The analyst expects the company's net income to continue to increase at the same rate as in the past. In forecasting future basic earnings per share, what special risk should the analyst consider if Lexi Carver's basic earnings are significantly larger than its diluted earnings?

15. Throughout the year, Connie Reed Limited had four million shares of common stock and

120,000 shares of convertible preferred stock outstanding. Each share of preferred is con-

vertible into four common shares. What number of shares should be used in the computation

of (a) basic earnings per share, and (b) diluted earnings per share?

17. In financial statement analysis, what is the basic objective of observing trends in data and

ratios? Suggest some other standards of comparison.

19. Net sales of Crimson Lights Caf have been increasing at a reasonable rate, but net income

has been declining steadily as a percentage of these sales. What appears to be the problem?

20. Under what circumstances might a company have a high p/e ratio even when investors are

not optimistic about the company's future prospects?